X Company has two production departments A and B At the star

X Company has two production departments, A and B. At the start of the year, the following budgeted information is available: Department A Overhead Direct labor hours Machine hours $4,500,000 50,000 120,000 Department B Overhead Direct labor hours Machine hours $1,900,000 50,000 130,000 The following information is for two specific jobs, Job 111 and Job 222, that were completed during the year: Department A Department B Job 111 Direct labor hours Machine hours 809 1,080 272 890 ob 222 Direct labor hours Machine hours 313 1,220 599 750 4. Using a plantwide allocation system with direct labor hours as the cost driver, what is the allocation to Job 222 (round overhead rates to two decimal places)? 14.25 Submit Answer Incorrect. Tries 1/3 Previous Tries 5. Using a departmental allocation system with direct labor hours as the cost driver in Department A and machine hours as the cost driver in Department B, what is the allocation to Job 222 (round overhead rates to two decimal places)? Submit Answer Tries 0/3

Solution

Answer =1 CALCULATION OF THE RECOVERY RATE OF OVERHEAD FOR DEPARTMENT A WITH DIRECT LABOUR HOURS Overhead Cost \"/\"   Direct Labour Hours \"=\" Overhead Rate Per hours $                                 45,00,000 \"/\"   $                           50,000 \"=\" $                          90 COST ALLOCATIO TO THE DEPARTMEN A = Job 222 \"x\" Overhead rate = Direct Labour Hours 313 \"x\" $                                90 $                  28,170 Machine Hours 1220 \"x\" $                                90 $              1,09,800 Total Cost $              1,37,970 CALCULATION OF THE RECOVERY RATE OF OVERHEAD FOR DEPARTMENT B WITH MACHIENE HOURS Overhead Cost \"/\"   Machiene Hours \"=\" Overhead Rate Per hours $                                 19,00,000 \"/\"   $                       1,30,000 \"=\" $                          15 COST ALLOCATION TO THE DEPARTMEN B = Job 222 \"x\" Overhead rate = Direct Labour Hours 599 \"x\" $                                15 $                    8,755 Machine Hours 750 \"x\" $                                15 $                  10,962 Total Cost $                  19,716