You Have Been Hired by Thompson Waterfall Manufacturing

Essay

You have been hired by Thompson Waterfall Manufacturing. Your first task is examine different distribution methods for applying factory overhead to the various production orders that are processed during a year.
The following information was taken from the annual budget:
a.Determine the following factory overhead application rates under each of the following methods:(1)Direct labor cost(2)Direct labor hours(3)Machine hours
b.Prepare a schedule showing the prime cost and total cost of Order 329 with the factory overhead costs applied on each of the three bases; Job Cost Sheet 329 shows the following: raw materials, $6,200; direct labor, 6,000 hours and $29,000; machine hours, 2,800.