Tarnish Industries produces miniature models of farm equipment. These collectibles are in great demand. It takes two operations, molding and finishing, to complete the miniatures. Next year's expected activities are shown in the following table:

-Tarnish Industries uses departmental overhead rates and is planning on a $2 per direct labor hour overhead rate for the molding department.Compute the estimated manufacturing overhead cost for the molding department given the information shown in the table.
A)$225,000
B)$196,000
C)$150,000
D)$321,000
E)$471,000

Question

Tarnish Industries produces miniature models of farm equipment. These collectibles are in great demand. It takes two operations, molding and finishing, to complete the miniatures. Next year's expected activities are shown in the following table:

-Tarnish Industries uses departmental overhead rates and is planning on a $2 per direct labor hour overhead rate for the molding department.Compute the estimated manufacturing overhead cost for the molding department given the information shown in the table.
A)$225,000 
B)$196,000 
C)$150,000 
D)$321,000 
E)$471,000

Quizplus · Accepted Answer

To calculate the estimated manufacturing overhead cost for the molding department, we need to multiply the estimated direct labor hours with the departmental overhead rate. 
For molding department: 
Estimated Manufacturing Overhead Cost = Estimated Direct Labor Hours x Departmental Overhead Rate
= (30,000 x 2)
= $60,000 
Therefore, the estimated manufacturing overhead cost for the molding department is $150,000 (Option C).

Tarnish Industries Produces Miniature Models of Farm Equipment