Answer:
Machining:
Allocated MOH= $603
Assembly:
Allocated MOH= $450
Explanation:
Giving the following information:
Machining:
Allocates overhead using machine-hours
Estimated manufacturing overhead: $670,000
Estimated machine-hours= 10,000
Assembly:
Allocates overhead using direct labor hours.
Estimated manufacturing overhead: $450,000
Estimated direct labor hours= 15,000 hours
First, we need to calculate the estimated manufacturing overhead rate for each department:
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machining:
Estimated manufacturing overhead rate= 670,000/10,000= $67 per machine hour
Assembly:
Estimated manufacturing overhead rate= 450,000/15,000= $30 per direct labor hour.
Job 601:
Machining Department: 9 Machine Hours
Assembly Department: 15 DL hours
To allocate overhead we use the following formula:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Machining:
Allocated MOH= 67*9= $603
Assembly:
Allocated MOH= 30*15= $450
