Estimated or budgeted cost and operating data for threecompanies for 2015 are given below:
CompanyX CompanyY Company Z
Units to beproduced 10,000 8,000 12,000
Machine-hours 50,000 10,000 6,000
Direct labour-hours 12,000 16,000 36,000
Direct labourcost $48,000 $64,000 $150,000
Factory overheadcost 150,000 40,000 60,000
Predetermined overhead rates are calculated on the followingbases in the three companies:
Overhead rate based on
CompanyX Machine-hours
CompanyY Direct labour-hours
CompanyZ Direct labour cost
Required:
a. Calculate the predeterminedoverhead rate to be used in each company during 2015.
b. Assume that three jobs are worked onduring 2015 in company X. Machine-hours recorded by jobs are: job23, 21,000 hours; job 29, 16,000 hours; and job 31, 11,000 hours.How much overhead will the company apply to work in process? If actual overhead costs total$149,000 for 2015, will overhead be over- orunder-applied? By how much?
Estimated or budgeted cost and operating data for threecompanies for 2015 are given below:
CompanyX CompanyY Company Z
Units to beproduced 10,000 8,000 12,000
Machine-hours 50,000 10,000 6,000
Direct labour-hours 12,000 16,000 36,000
Direct labourcost $48,000 $64,000 $150,000
Factory overheadcost 150,000 40,000 60,000
Predetermined overhead rates are calculated on the followingbases in the three companies:
Overhead rate based on
CompanyX Machine-hours
CompanyY Direct labour-hours
CompanyZ Direct labour cost
Required:
a. Calculate the predeterminedoverhead rate to be used in each company during 2015.
b. Assume that three jobs are worked onduring 2015 in company X. Machine-hours recorded by jobs are: job23, 21,000 hours; job 29, 16,000 hours; and job 31, 11,000 hours.How much overhead will the company apply to work in process? If actual overhead costs total$149,000 for 2015, will overhead be over- orunder-applied? By how much?
