he Oliver Company manufactures products in two departments: Mixing and Packaging. The company was allocating manufacturing overhead using a single plantwide rate of $2.40 with direct labor hours as the allocation base. The company has refined its allocation system by separating manufacturing overhead costs into two cost pools—one for each department. The estimated costs for the Mixing Department, $490,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 175,000. The estimated costs for the Packaging Department, $103,500, will be allocated based on machine hours, and the estimated machine hours for the year are 30,000. In October, the company incurred 68,000 direct labor hours in the Mixing Department and 3,000 machine hours in the Packaging Department. Read the requirements LOADING... . Requirement 1. Compute the predetermined overhead allocation rates. Round to two decimal places. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each department. Predetermined OH ÷ = allocation rate Mixing ÷ = Packaging ÷ = Requirement 2. Determine the total amount of overhead allocated in October. Begin by selecting the formula to allocate overhead costs. Allocated mfg. × = overhead costs Compute the overhead allocated in October for each department and the total for both departments. Mixing Packaging Total
he Oliver Company manufactures products in two departments: Mixing and Packaging. The company was allocating manufacturing overhead using a single plantwide rate of $2.40 with direct labor hours as the allocation base. The company has refined its allocation system by separating manufacturing overhead costs into two cost pools—one for each department. The estimated costs for the Mixing Department, $490,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 175,000. The estimated costs for the Packaging Department, $103,500, will be allocated based on machine hours, and the estimated machine hours for the year are 30,000. In October, the company incurred 68,000 direct labor hours in the Mixing Department and 3,000 machine hours in the Packaging Department. Read the requirements LOADING... . Requirement 1. Compute the predetermined overhead allocation rates. Round to two decimal places. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each department. Predetermined OH ÷ = allocation rate Mixing ÷ = Packaging ÷ = Requirement 2. Determine the total amount of overhead allocated in October. Begin by selecting the formula to allocate overhead costs. Allocated mfg. × = overhead costs Compute the overhead allocated in October for each department and the total for both departments. Mixing Packaging Total
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 13EB: Stacks manufactures two different levels of hockey sticks: the Standard and the Slap Shot. The total...
Related questions
Question
The
overhead using a single plantwide rate of
Oliver
Company manufactures products in two departments: Mixing and Packaging. The company was allocating manufacturing $2.40
with direct labor hours as the allocation base.The company has refined its allocation system by separating manufacturing overhead costs into two cost
pools—one
for each department. The estimated costs for the Mixing Department,
$490,000,
will be allocated based on direct labor hours, and the estimated direct labor hours for the year are
175,000.
The estimated costs for the Packaging Department,
$103,500,
will be allocated based on machine hours, and the estimated machine hours for the year are
30,000.
In
October,
the company incurred
68,000
direct labor hours in the Mixing Department and
3,000
machine hours in the Packaging Department.Read the
requirements
LOADING...
.Requirement 1. Compute the predetermined overhead allocation rates. Round to two decimal places.
Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each department.
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Predetermined OH
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÷
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=
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allocation rate
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Mixing
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÷
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=
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Packaging
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÷
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=
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Requirement 2. Determine the total amount of overhead allocated in
October.
Begin by selecting the formula to allocate overhead costs.
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Allocated mfg.
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×
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=
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overhead costs
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Compute the overhead allocated in
October
for each department and the total for both departments.
Mixing
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Packaging
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Total
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