1. Camp Company uses a job order costing system. The company has two departments through which most jobs pass. Selected budgeted and actual data for the past year follow:
|
Department A |
Department B |
|
|
Budgeted overhead |
$100,000 |
$500,000 |
|
Actual overhead |
$110,000 |
$520,000 |
|
Expected activity (direct labor hours) |
50,000 |
10,000 |
|
Expected machine hours |
10,000 |
50,000 |
|
Actual direct labor hours |
51,000 |
9,000 |
|
Actual machine hours |
10,500 |
52,000 |
During the year, several jobs were completed. Data pertaining to one such job follows:
Job 310
|
Direct materials |
$20,000 |
|
Direct labor cost: |
|
|
Department A (5,000 hours @ $6) |
$30,000 |
|
Department B (1,000 hours @ $6) |
$ 6,000 |
|
Machine hours used: |
|
|
Department A |
100 |
|
Department B |
1,200 |
|
Units produced |
10,000 |
Camp Company uses a plant wide predetermined overhead rate to assign overhead to jobs.
Direct labor hours (DLH) is used to compute the predetermined overhead rate.
(1) Compute the predetermined overhead rate.
(2) Using the predetermined rate, compute the per unit manufacturing cost of Job 310.
(3) Recalculate the unit manufacturing cost for Job :310 using departmental overhead rates.
Use direct labor hours for Department A and machine hours for Department B.