Jamaal Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to products. Manufacturing overhead costs are applied on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 2015, the following estimates were provided for the coming year:
Required:
a. Compute the manufacturing overhead allocation rate for each department.
b. Compute the total cost of Job 846.
c. Provide possible reasons why Jamaal Manufacturing uses two different cost allocation rates.

Question

Jamaal Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to products. Manufacturing overhead costs are applied on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 2015, the following estimates were provided for the coming year:
  Required:
a. Compute the manufacturing overhead allocation rate for each department.
b. Compute the total cost of Job 846.
c. Provide possible reasons why Jamaal Manufacturing uses two different cost allocation rates.

Quizplus · Accepted Answer

The Answer of Jamaal Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to products. Manufacturing overhead costs are applied on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 2015, the following estimates were provided for the coming year:
  Required:
a. Compute the manufacturing overhead allocation rate for each department.
b. Compute the total cost of Job 846.
c. Provide possible reasons why Jamaal Manufacturing uses two different cost allocation rates.

Jamaal Manufacturing Uses Departmental Cost Driver Rates to Apply Manufacturing