Lifestyle Roofing uses job order costing and applies manufacturing overhead too individual projects using predetermined overhead rates. In the Installation Division, overhead is applied on the basis of direct labour hours, and in the Disposal Division, overhead is applied on the basis of debris tonnage hauled to the landfill. At the beginning of the current year, management made the following budget estimates to determine overhead application rates Annual Extinutes Manufacturing overhed Deed i Job #652 for Bees Grocery measured 8,348 square feet. The job was started and completed in May. Information pertaining to this project is provided below u no 652.348 squee Cost of Diect lebor Installation Disposal $70,000 $20.000 $100.000 $36.000 25.000 10.000 300 0 use on job $30.000 $1,000 $7800 $100 d. Assume that actual overhead costs for the year were $98,000 in the Installation Division, and $41,000 in the Disposal Division. Assume also that the actual direct labour hours used by the Installation Division were 24,000, and actual debris tonnage removed by the Disposal Division totalled 312 tons for the year. On the basis of this information, determine the over-or underapplied overhead in each division for the year
Lifestyle Roofing uses job order costing and applies manufacturing overhead too individual projects using predetermined overhead rates. In the Installation Division, overhead is applied on the basis of direct labour hours, and in the Disposal Division, overhead is applied on the basis of debris tonnage hauled to the landfill. At the beginning of the current year, management made the following budget estimates to determine overhead application rates Annual Extinutes Manufacturing overhed Deed i Job #652 for Bees Grocery measured 8,348 square feet. The job was started and completed in May. Information pertaining to this project is provided below u no 652.348 squee Cost of Diect lebor Installation Disposal $70,000 $20.000 $100.000 $36.000 25.000 10.000 300 0 use on job $30.000 $1,000 $7800 $100 d. Assume that actual overhead costs for the year were $98,000 in the Installation Division, and $41,000 in the Disposal Division. Assume also that the actual direct labour hours used by the Installation Division were 24,000, and actual debris tonnage removed by the Disposal Division totalled 312 tons for the year. On the basis of this information, determine the over-or underapplied overhead in each division for the year
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 30P: Primera Company produces two products and uses a predetermined overhead rate to apply overhead....
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Transcribed Image Text:Lifestyle Roofing uses job order costing and applies manufacturing overhead too individual projects
using predetermined overhead rates. In the Installation Division, overhead is applied on the basis of
direct labour hours, and in the Disposal Division, overhead is applied on the basis of debris tonnage
hauled to the landfill. At the beginning of the current year, management made the following budget
estimates to determine overhead application rates
Annual Estimates
Manufacturing overhed
Drectors
Tons of Debris
Job #652 for Bees Grocery measured 8,348 square feet. The job was started and completed in May.
Information pertaining to this project is provided below
30 no 652.348 squ
Cost of
Drect box cost
Dit
hours
Tons of debris
Installation Disposal
$150.000 $20.000
$100.000 $36.000
25.000 10.000
0
use on job
Instalation Disposal
$30.000 $1.000
$7,800 $100
250
d. Assume that actual overhead costs for the year were $98,000 in the installation Division, and
$41,000 in the Disposal Division. Assume also that the actual direct labour hours used by the
Installation Division were 24,000, and actual debris tonnage removed by the Disposal Division
totalled 312 tons for the year. On the basis of this information, determine the over-or
underapplied overhead in each division for the year.
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