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Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787 Exercise 31
PREDETERMINED OVERHEAD RATE, APPLICATION OF OVERHEAD
Jackson Company and Royce Company both use predetermined overhead rates to apply manufacturing overhead to production. Jackson's is based on machine hours, and Royce's is based on materials cost. Budgeted production and cost data for Jackson and Royce are as follows:
At the end of the year, Jackson Company had incurred overhead of $610,000 and had produced 19,600 units using 31,980 machine hours and materials costing $294,000. Royce Company had incurred overhead of $648,000 and had produced 61,500 units using 22,650 machine hours and materials costing $1,185,000.
Required:
1. Compute the predetermined overhead rates for Jackson Company and Royce Company.
2. Was overhead over- or underapplied for each company, and by how much?
Jackson Company and Royce Company both use predetermined overhead rates to apply manufacturing overhead to production. Jackson's is based on machine hours, and Royce's is based on materials cost. Budgeted production and cost data for Jackson and Royce are as follows:
At the end of the year, Jackson Company had incurred overhead of $610,000 and had produced 19,600 units using 31,980 machine hours and materials costing $294,000. Royce Company had incurred overhead of $648,000 and had produced 61,500 units using 22,650 machine hours and materials costing $1,185,000.
Required:
1. Compute the predetermined overhead rates for Jackson Company and Royce Company.
2. Was overhead over- or underapplied for each company, and by how much?
Explanation
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We are given the budgeted production and...
Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
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