Yahya Company uses a job costing system with machine hours as the allocation base for overhead.The company uses normal costing to develop the...
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Q1.     Yahya Company uses a job costing system with machine hours as the allocation base for overhead. The

company uses normal costing to develop the overhead allocation rate. 

           The following data are available for the latest accounting period:

Estimated fixed factory overhead cost                   $200,000

Estimated machine-hours                                         140,000

Actual fixed factory overhead cost incurred          $220,000

Actual machine-hours used                                      160,000


              Jobs worked on:

                        Job No.                        Machine Hours Used

1040                                  17,000

1050                                  19,000

1060                                  12,000

1070                                  11,000

a.  Compute the overhead allocation rate.

b.  Choose one job for which you will find the overhead allocated.

c.  Determine total over or underapplied overhead at the end of the year

Q 2 Give numerical example explaining the concept of Equivalent number of units. Discuss the advantages of using equivalent number f units?

Q 3 Give example related to ABC costing and find the overhead allocation rate for this example using ABC Costing? Discuss the advantages of using ABC Costing?

Top Answer

overhead allocation rate = actual cost / actual hrs worked = $220000/ 160000 = 1.375. best Job is Job Number= 1050 Equivalent... View the full answer

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