Jones Inc., Snapper Corp., Smith Jones, Tanner Bay, XYZ Corporation

1. Jones Inc. computes its predetermined overhead rate annually on the basis of machine hours. At the beginning of the year it estimated that its total manufacturing overhead would be $900,000 and the total machine hours (mh) would be 45,000. Its actual total manufacturing overhead for the year was $995,000 and its actual machine hours were 50,000.

What is the predetermined overhead rate for the year? Show Computations.  

 

2.  Snapper Corp. computes its predetermined overhead rate annually on the basis of direct-labor hours. At the beginning of the year it estimated that its total manufacturing overhead would be $240,000 and the total direct labor hours (dlh) would be 6,000. Its actual total manufacturing overhead for the year was $210,000 and its actual direct labor hours were 5,400.

How much would be applied to the jobs for the year? Show Computations. 

 

3.  Smith Jones Company uses a predetermined overhead rate of 75% of direct labor cost. This predetermined rate was based on $60,000 estimated direct labor cost and $45,000 of estimated total manufacturing overhead. The company incurred actual total manufacturing costs of $52,000 and $71,000 of direct labor cost during the period.

What is the amount of overapplied or underapplied manufacturing overhead? Show Computations. 

 

4.  Tanner Bay Inc. has two departments, Assembly and Packaging. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Assembly Department bases its rate on machine hours and the Packaging Department bases its rate on direct labor hours. At the beginning of the year, the company made the following estimates:

Assembly        Packaging

Direct Labor-hours                     3,000                4,000

Machine-hours                           8,500                9,900

Manufacturing Overhead       $144,500         $172,000

Direct labor cost                        $89,200         $101,000

Assume also the following actual data on Job #503 which was started and completed during the year:

Assembly        Packaging

Direct Labor-hours                        23                    37

Machine-hours                            109                  142

Manufacturing Overhead       $8,787              $6,566

Direct labor cost                       $2,100              $1,990 

What is the predetermined overhead rate to be used in each department? Show computations.

 

5.  XYZ Corporation has two departments, Machining and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Machining Department bases its rate on machine hours and the Assembly Department bases its rate on direct labor cost. At the beginning of the year, the company made the following estimates;

Machining       Assembly

Direct Labor-hours                  11,000                9,000

Machine-hours                        23,000              14,000

Manufacturing Overhead       $368,000         $312,000

Direct labor cost                      $102,100           $78,000

Assume also the following actual data on Job #219 which was started and completed during the year:

Machining       Assembly

Direct Labor-hours                      104                   98

Machine-hours                            189                 290

Materials requisitioned            $33,400         $44,200

Direct labor cost                       $4,200            $9,600

 

 a. What is the total cost assigned to Job #219? Show Computation.

b. What is the predetermined overhead rate to be used in each department? Show computations