Professional Documents
Culture Documents
Case 1
Required:
c. Determine the estimated total manufacturing costs for the Maize High School job.
Case 2
1
Hill Manufacturing uses departmental cost driver rates to apply manufacturing overhead
costs to products. Manufacturing overhead costs are applied on the basis of machine-hours in
the Machining Department and on the basis of direct labor-hours in the Assembly
Department. At the beginning of 20X5, the following estimates were provided for the coming
year:
Machining Assembly
Direct labor-hours 10,000 dlh 90,000 dlh
Machine-hours 100,000 mh 5,000 mh
Direct labor cost $ 80,000 $720,000
Manufacturing overhead costs $250,000 $360,000
The accounting records of the company show the following data for Job #846:
Machining Assembly
Direct labor-hours 50 dlh 120 dlh
Machine-hours 170 mh 10 mh
Direct material cost $2,700 $1,600
Direct labor cost $ 400 $ 900
Required:
a. Compute the manufacturing overhead allocation rate for each department.
c. Provide possible reasons why Hill Manufacturing uses two different cost
allocation rates.
Case 3
2
Cowley County Hospital uses a job-costing system for all patients who have surgery. In
March, the pre-operating room (PRE-OP) and operating room (OR) had budgeted allocation
bases of 4,000 nursing hours and 2,000 nursing hours, respectively. The budgeted nursing
overhead charges for each department for the month were $168,000 and $132,000,
respectively. The hospital floor for surgery patients had budgeted overhead costs of
$1,200,000 and 15,000 nursing hours for the month. For patient Fred Adams, actual hours
incurred were eight and four hours, respectively, in the PRE-OP and OR rooms. He was in
the hospital for 4 days (96 hours). Other costs related to Adams were:
PRE-OP OR In-room
Costs Costs Costs
Patient medicine $ 200 $ 500 $2,400
Direct nursing time $1,000 $2,000 $3,000
The hospital uses a budgeted overhead rate for applying overhead to patient stays.
Required:
What is the total cost of the stay of patient Fred Adams?