5) Managerial Financial Accounting Assignments AE2-12 Solution

# 5) Managerial Financial Accounting Assignments AE2-12 Solution

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AE2-12

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Allocating Manufacturing Overhead to Jobs [LO 6, 7] Webber Fabricating estimated the following annual costs. Ex pec ted ann ual dire ct lab or hou rs 43, 800 Ex pec ted ann ual dire ct lab or cos t \$62 7,0 00 Ex pec ted ma chi ne hou rs 22, 500 Ex pec ted mat eria l cos t for the yea r \$80 6,4 00
Ex pec ted ma nuf act uri ng ove rhe ad \$1, 213 ,00 0 Calculate overhead allocation rates using each of the four possible allocation bases provided. (Round answers to 2 decimal places, e.g. 5.25.) Direct labor hours \$ 27.70 Direct labor cost \$ 1.93 Machine hours \$ 53.91 Direct material cost \$ 1.50 AE2-12

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Overhead allocation rates: Allocation base Allocation Rate Direct labor hours \$1,213,000 ÷ 43,800 DL Direct labor cost \$1,213,000 ÷ \$627,000 = Machine hours \$1,213,000 ÷ 22,500 MH Direct material cost \$1,213,000 ÷ \$806,400 =

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Unformatted text preview: Determine the cost of the following job (number 253) using each of the four overhead allocation rates. (Use rounded amounts from previous question to calculate answers for this question. Round answers to 0 decimal places, e.g. 125.) Job 253 Direct materials \$3,140 Direct labor (157 hrs @ \$12/hr) \$1,884 Machine hours used 157 Direct labor hours \$ Direct labor cost \$ Machine hours \$ Direct material cost \$ AE2-12 Cost of Job No. 253 using different allocation bases: Cost DLH DL Cost MH DM Cost Direct Materials \$3,140 \$3,140 \$3,140 \$3,140 Direct Labor 1,884 1,884 1,884 1,884 Manufacturing Overhead 4,347 3,636 8,464 4,710 Total \$9,371 \$8,660 \$13,488...
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