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Cost Accounting Assignment 1 Spring 2019

The document outlines a cost accounting assignment involving two companies, Hill Manufacturing and Jordan Company, which use different methods to allocate manufacturing overhead costs. It provides specific data for each department, including direct labor hours, machine hours, direct labor costs, and manufacturing overhead costs, and requires calculations for overhead allocation rates, total job costs, and unit costs. Additionally, it prompts for an explanation of why different cost allocation methods are used in Hill Manufacturing.

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56 views2 pages

Cost Accounting Assignment 1 Spring 2019

The document outlines a cost accounting assignment involving two companies, Hill Manufacturing and Jordan Company, which use different methods to allocate manufacturing overhead costs. It provides specific data for each department, including direct labor hours, machine hours, direct labor costs, and manufacturing overhead costs, and requires calculations for overhead allocation rates, total job costs, and unit costs. Additionally, it prompts for an explanation of why different cost allocation methods are used in Hill Manufacturing.

Uploaded by

jestina
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Cost Accounting Assignment

1. Hill Manufacturing uses departmental cost driver rates to apply manufacturing overhead
costs to products. Manufacturing overhead costs are applied on the basis of the machine-
hours in the machining Department and on the basis of direct labor-hours in the
Assembly Department. At the beginning of 20x3, 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 costs $ 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 50dlh 120 dlh

Machine hours 170 mh 10 mh

Direct materials costs $ 2,700 $1,600

Manufacturing labour costs $ 400 $ 900

Required:

a. compute the manufacturing overhead allocation rate for each department


(10 marks)
b. compute the total cost of Job #846 (10 marks)
c. provide possible reasons why Hill Manufacturing uses two different cost
allocation (5 marks)

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2. Jordan Company has two departments, X and Y. Overhead is applied based on direct labor cost
in Department X and machine-hours in Department Y. The following additional information is
available:

Budgeted Amounts Department X Department Y

Direct labour cost $180,000.00 $165,000.00

Factory overhead $225,000.00 $180,000.00

Machine-hours 51,000 mh 40,000 mh

Actual data for Job #10 Department X Department Y

Direct materials requisitioned $10,000.00 $16,000.00

Direct labor cost $11,000.00 $14,000.00

Machine-hours 5,000 mh 3,000 mh

Required: -

a. Compute the budgeted factory overhead rate for Department X


b. Compute the budgeted factory overhead rate for Department Y
c. What is the total overhead cost of Job 10?
d. If Job 10 consists of 50 units of product, what is the unit cost of this job?

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