Reference no: EM133053793
Question - The Braxton Machinery Company makes bottle-capping equipment. Each order is somewhat different from all others, so that the firm uses job order costing. There are two departments, Machining and Assembly. The Machining Depart is highly mechanized and the Assembly Department is labor intensive. Accordingly, the firm applies overhead using machine-hours in the Machining Department and direct labor hours in the Assembly Department. Budgeted data for the two departments for 2020 appears below:
Machining Assembly Total budgeted overhead $360,000 $144,000
Machine hours 120,000 N/A Direct labor hours N/A 72,000
During March 2020 the firm worked on two jobs. Data for these jobs appear below:
Job #1029 Job #1030 Materials used $21,000 $32,000
Direct labor, Assembly ($6/hour) 18,000 19,200 Direct labor hours, Assembly 3,000 3,200
Machine-hours, Machining 4,000 5,000
Required -
a. Calculate the predetermined overhead rate for each department using the budgeted results.
b. Calculate the amounts of overhead applied to each job and the total cost of each job.
c. Actual overhead in the Machining Department was $28,000 and in the Assembly Department was $12,100. Calculate the amounts of overapplied or underapplied overhead for each department.
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