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Problem - Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the year--Job Bravo.
Estimated Data
Assembly
Fabrication
Total
Manufacturing overhead costs
$1,400,000
$1,680,000
$3,080,000
Direct labor-hours
70,000
42,000
112,000
Machine-hours
28,000
140,000
168,000
Job Bravo
15
7
22
10
17
Required:
1. If Wilmington used a plantwide predetermined overhead rate based on direct labor-hours, how much manufacturing overhead would be applied to Job Bravo?
2. If Wilmington uses departmental predetermined overhead rates with direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication, how much manufacturing overhead would be applied to Job Bravo?
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