Murphy's Machine Works manufactures custom equipment. Sector's Machine Works currently uses a plantwide overhead rate, based on direct labour hours, to allocate its $2,500,000 of manufacturing overhead to individual jobs.
Murphy's plant completed Jobs 600 and 601 on July 15. Both jobs incurred a total of 9 DL hours throughout the entire production process. Job 600 incurred 5 MH in the Machining Department and 6 DL hours in the Assembly Department (the other 3 DL hour occurred in the Machining Department). Job 601 incurred 8 MH in the Machining Department and 7 DL hours in the Assembly Department (the other two DL hours occurred in the Machining Department).
Requirements
1. Compute the plantwide overhead rate, assuming Murphy expects to incur 50,000 total DL hours during the year.
2. How much manufacturing overhead would be allocated to each job if Murphy uses the plant wide rate?

Question

Quizplus · Accepted Answer

The Answer of Murphy's Machine Works manufactures custom equipment. Sector's Machine Works currently uses a plantwide overhead rate, based on direct labour hours, to allocate its $2,500,000 of manufacturing overhead to individual jobs.
Murphy's plant completed Jobs 600 and 601 on July 15. Both jobs incurred a total of 9 DL hours throughout the entire production process. Job 600 incurred 5 MH in the Machining Department and 6 DL hours in the Assembly Department (the other 3 DL hour occurred in the Machining Department). Job 601 incurred 8 MH in the Machining Department and 7 DL hours in the Assembly Department (the other two DL hours occurred in the Machining Department).
Requirements
1. Compute the plantwide overhead rate, assuming Murphy expects to incur 50,000 total DL hours during the year.
2. How much manufacturing overhead would be allocated to each job if Murphy uses the plant wide rate?

Murphy's Machine Works Manufactures Custom Equipment