The Dougherty Furniture Company manufactures tables. In March, the two production departments had budgeted allocation bases of 4,000 machine hours in Department 100 and 8,000 direct manufacturing labour hours in Department 200. The budgeted manufacturing overheads for the month were $57,500 and $62,500, respectively. For Job A, the actual costs incurred in the two departments were as follows:

Job A incurred 800 machine hours in Department 100 and 300 manufacturing labour hours in Department 200. The company uses a budgeted indirect cost allocation rate for applying overhead to production.
Required:
a. Determine the budgeted manufacturing indirect cost allocation rate for each department.
b. Prepare the necessary journal entries to summarize the March transactions for Department 100.
c. What is the total cost of Job A?

Question

The Dougherty Furniture Company manufactures tables. In March, the two production departments had budgeted allocation bases of 4,000 machine hours in Department 100 and 8,000 direct manufacturing labour hours in Department 200. The budgeted manufacturing overheads for the month were $57,500 and $62,500, respectively. For Job A, the actual costs incurred in the two departments were as follows:
  
Job A incurred 800 machine hours in Department 100 and 300 manufacturing labour hours in Department 200. The company uses a budgeted indirect cost allocation rate for applying overhead to production.
Required:
a. Determine the budgeted manufacturing indirect cost allocation rate for each department.
b. Prepare the necessary journal entries to summarize the March transactions for Department 100.
c. What is the total cost of Job A?

Quizplus · Accepted Answer

The Answer of The Dougherty Furniture Company manufactures tables. In March, the two production departments had budgeted allocation bases of 4,000 machine hours in Department 100 and 8,000 direct manufacturing labour hours in Department 200. The budgeted manufacturing overheads for the month were $57,500 and $62,500, respectively. For Job A, the actual costs incurred in the two departments were as follows:
  
Job A incurred 800 machine hours in Department 100 and 300 manufacturing labour hours in Department 200. The company uses a budgeted indirect cost allocation rate for applying overhead to production.
Required:
a. Determine the budgeted manufacturing indirect cost allocation rate for each department.
b. Prepare the necessary journal entries to summarize the March transactions for Department 100.
c. What is the total cost of Job A?

The Dougherty Furniture Company Manufactures Tables