Maynard Manufacturing Company Uses a Job-Order Costing System in Its

Essay

Maynard Manufacturing Company uses a job-order costing system in its two departments,Machining and Assembly.Overhead is allocated in the Machining Department on the basis of machine hours,while in the Assembly Department overhead is allocated on the basis of direct labor cost.The following budget data are provided:
$$\begin{array} { l r r } & \text { Machining } &{ \text { Assembly } } \\& \text { Department } & \text { Department } \\\text { Marnufacturing overhead } & \$ 500,000 & \$ 1,075,000 \\\text { Direct labor cost } & 350,000 & 500,000 \\\text { Machine hours } & 100,000 & 10,000 \\\text { Direct labor hours } & 50,000 & 150,000\end{array}$$ The following information is provided for a job (Job No.510)recently completed by the company:
$$\begin{array} { l c r } & \begin{array} { c } \text { Machining } \\\text { Department }\end{array} & \begin{array} { c } \text { Assembly } \\\text { Department }\end{array} \\\text { Marnfacturing overhead } & \$ 25,000 & \$ 37,500 \\\text { Direct labor cost } & 10,000 & 12,500 \\\text { Machine hours } & 5,000 & 1,000 \\\text { Direct labor hours } & 2,000 & 3,000\end{array}$$ Required:
1)Compute the two departmental overhead rates.
2)Compute the cost of Job No.510.
3)Assume that the company decides to use a single overhead rate for the two departments,calculated by adding their overhead costs and using direct labor hours as the allocation base.What would the overhead rate be,and how much manufacturing overhead cost would be assigned to Job No.510? (Do not round your intermediate calculation.)