Question

Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the year--Job Bravo.
Estimated Data Assembly Fabrication Total
Manufacturing overhead costs $ 7,250,000 $ 7,830,000 $ 15,080,000
Direct labor-hours 145,000 87,000 232,000
Machine-hours 58,000 290,000 348,000
Job Bravo Assembly Fabrication Total
Direct labor-hours 30 22 52
Machine-hours 22 25 47
Required:
1. If Wilmington used a plantwide predetermined overhead rate based on direct labor-hours, how much manufacturing overhead would be applied to Job Bravo?
2. If Wilmington uses departmental predetermined overhead rates with direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication, how much manufacturing overhead would be applied to Job Bravo? (Round your intermediate calculation to 2 decimal places.)
1. Plantwide manufacturing overhead applied to Job Bravo
2. Manufacturing overhead applied from Assembly to Job Bravo
Manufacturing overhead applied from Fabrication to Job Bravo
Total departmental manufacturing overhead applied to Job Bravo

Answer 1

Answer:

1. $3,380

2. $2,175

Explanation:

Part 1

Predetermined overhead rate = Total Overheads for the Company ÷ Total  Direct labor-hours for the Company

                                                  =  $ 15,080,000 ÷ 232,000

                                                  = $65

Overheads applied to Job Bravo = ( 30 x $65) + (22 x $65) =  $3,380

Part 2

Assembly department

Predetermined overhead rate =  $ 7,250,000 ÷ 145,000

                                                  = $50

Assembly department

Predetermined overhead rate =  $ 7,830,000 ÷ 290,000

                                                  = $27

Overheads applied to Job Bravo = (30 x $50) + (25 x $27) = $2,175

Answer 2

1. If Wilmington Company used a plant-wide predetermined overhead rate based on direct labor-hours, the manufacturing overhead applied to Job Bravo is $3,480 ($1,500 + $1,980).

Plant-wide rate                   $50                  $90

Total overhead applied    $1,500 (30 x $50) $1,980 (22 x$90) $3,480

2. If Wilmington Company uses departmental predetermined overhead rates with direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication, the manufacturing overhead applied to Job Bravo is $2,175 ($1,500 + $675).

Total overhead applied    $1,500 (30 x $50) $675 (25 x$27) $2,175

Data and Calculations:

Estimated Data                              Assembly       Fabrication           Total

Manufacturing overhead costs $ 7,250,000    $ 7,830,000   $ 15,080,000

Direct labor-hours                             145,000             87,000          232,000

Plant-wide rate based on labor-hours  $50                  $90

                                   ($7,250,000/145,000)          ($7,830,000/87,000)

Machine-hours                                   58,000          290,000          348,000

Plant-wide rate

 based on machine-h ours                  $125               $27                                

                                  ($7,250,000/58,000)           ($7,830,000/290,000)

Job Bravo                        Assembly         Fabrication          Total

Direct labor-hours                 30                     22                    52

Machine-hours                      22                     25                    47

Thus, the manufacturing overhead applied to Job Bravo would be different under the different allocation bases.

Learn more about the allocation of manufacturing overhead using different allocation bases here: https://brainly.com/question/4473400 and https://brainly.com/question/13312583