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A Company's Total Expected Overhead Costs and Related Overhead Data

Question 188

Essay

A company's total expected overhead costs and related overhead data are shown in the following table:
 Department A  Department B  Direct labor hours 85,000DLH72,000DLH Machine hours 79,050MH37,395MH Manufacturing overhead costs ?? Departmental overhead rate $4 per MH$8.31 per DLH \begin{array} { | l | l | l | } \hline & \text { Department A } & \text { Department B } \\\hline \text { Direct labor hours } & 85,000 \mathrm { DLH } & 72,000 \mathrm { DLH } \\\hline \text { Machine hours } & 79,050 \mathrm { MH } & 37,395 \mathrm { MH } \\\hline \text { Manufacturing overhead costs } & ? & ? \\\hline \text { Departmental overhead rate } & \$ 4 \text { per } \mathrm { MH } & \$ 8.31 \text { per DLH } \\\hline\end{array} a. Compute estimated manufacturing overhead costs for Department A.
b. Compute estimated manufacturing overhead costs for Department B.
c. Compute the departmental overhead rate based on direct labor hours for Department A.
d. Compute the departmental overhead rate based on machine hours for Department B.

Correct Answer:

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a. $4 per MH × 79,050 MH = $316,200 esti...

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