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Exercise 2-12 Allocating Manufacturing Overhead to Jobs

Exercise 2-12 Allocating Manufacturing Overhead to Jobs
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ACCOUNTING

MT425 / MT 425
Managerial Finance and Accounting
Kaplan University (KU Campus)

James Jiambalvo
Managerial Accounting, 4e
Hoboken, NJ: John Wiley & Sons.

Unit 2: Accounting, Management, and Cost Decisions

Chapter 2, Exercise 2-12 Allocating Manufacturing Overhead to Jobs [LO 6, 7] Webber Fabricating estimated the following annual costs.

Expected annual direct labor hours 40,000
Expected annual direct labor cost 625,000
Expected machine hours 20,000
Expected material cost for the year 800,000
Expected manufacturing overhead$1,000,000

Required
a. Calculate overhead allocation rates using each of the four possible allocation bases provided.
b. Determine the cost of the following job (number 253) using each of the four overhead allocation rates.

 

FILE: MS WORD

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