Industrial Products Inc.expects to incur $1,200,000 in manufacturing overhead costs this year.Industrial Products expects to use 15,000 direct labor hours at a cost of $192,000 and a total of 80,000 machine hours.Management of Delgado would like to evaluate the cost of Job 12 using three different approaches to allocating overhead costs.
(1) Prepare three separate predetermined overhead rates based on direct labor hours, direct labor cost and machine hours.

(2) With each of the predetermined overhead rates for Industrial Products (calculated in Requirement 1), determine the cost of Job 12 using the following information:

$\begin{array}{lll}
\text { Job 12: } & \text { Direct materials } & \$ 3,000 \
& \text { Direct labor } & 40 \text { hours at } \$ 16 \text { per hour }+8 \text { hours at } \$ 35 \text { per } \
&& \text { hour } \
& \text { Machine time } & 150 \text { hours }
\end{array}$

(3) What are two reasons Industrial Products might prefer to use one of these three owerhead allocation hases ower the othere?

Question

Industrial Products Inc.expects to incur $1,200,000 in manufacturing overhead costs this year.Industrial Products expects to use 15,000 direct labor hours at a cost of $192,000 and a total of 80,000 machine hours.Management of Delgado would like to evaluate the cost of Job 12 using three different approaches to allocating overhead costs.
 (1) Prepare three separate predetermined overhead rates based on direct labor hours, direct labor cost and machine hours.

(2) With each of the predetermined overhead rates for Industrial Products (calculated in Requirement 1), determine the cost of Job 12 using the following information:

$\begin{array}{lll}
\text { Job 12: } & \text { Direct materials } & \$ 3,000 \
& \text { Direct labor } & 40 \text { hours at } \$ 16 \text { per hour }+8 \text { hours at } \$ 35 \text { per } \
&& \text { hour } \
& \text { Machine time } & 150 \text { hours }
\end{array}$

(3) What are two reasons Industrial Products might prefer to use one of these three owerhead allocation hases ower the othere?

Quizplus · Accepted Answer

The Answer of Industrial Products Inc.expects to incur $1,200,000 in manufacturing overhead costs this year.Industrial Products expects to use 15,000 direct labor hours at a cost of $192,000 and a total of 80,000 machine hours.Management of Delgado would like to evaluate the cost of Job 12 using three different approaches to allocating overhead costs.
 (1) Prepare three separate predetermined overhead rates based on direct labor hours, direct labor cost and machine hours.

(2) With each of the predetermined overhead rates for Industrial Products (calculated in Requirement 1), determine the cost of Job 12 using the following information:

$\begin{array}{lll}
\text { Job 12: } & \text { Direct materials } & \$ 3,000 \
& \text { Direct labor } & 40 \text { hours at } \$ 16 \text { per hour }+8 \text { hours at } \$ 35 \text { per } \
&& \text { hour } \
& \text { Machine time } & 150 \text { hours }
\end{array}$

(3) What are two reasons Industrial Products might prefer to use one of these three owerhead allocation hases ower the othere?

Industrial Products Inc (3) What Are Two Reasons Industrial Products Might Prefer to This