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Cost Accounting Exercises

This document contains two exercises regarding cost accounting for manufacturing overhead costs. The first exercise provides estimates for Fox Manufacturing and involves calculating the overhead rate, overhead costs allocated to a specific job, and total manufacturing costs for that job. The second exercise provides estimates for Hill Manufacturing and involves calculating the overhead rates for two departments, the total costs for a specific job, and reasons for using two different overhead rates.

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Raniel Pamatmat
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357 views1 page

Cost Accounting Exercises

This document contains two exercises regarding cost accounting for manufacturing overhead costs. The first exercise provides estimates for Fox Manufacturing and involves calculating the overhead rate, overhead costs allocated to a specific job, and total manufacturing costs for that job. The second exercise provides estimates for Hill Manufacturing and involves calculating the overhead rates for two departments, the total costs for a specific job, and reasons for using two different overhead rates.

Uploaded by

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

116th MC

Exercise 1
Fox Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate
manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for
the coming year for the company and for the Maize High School Science Olympiad Jacket job.

Company Maize High School Job


Direct materials P50,000 P500
Direct manufacturing labor P10,000 P100
Manufacturing overhead costs P40,000
Machine-hours 100,000 mh 800 mh

Required:

1. For Fox Manufacturing, determine the annual manufacturing overhead cost-allocation rate.
2. Determine the amount of manufacturing overhead costs allocated to the Maize High School job.
3. Determine the estimated total manufacturing costs for the Maize High School job.

Exercise 2
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 P80,000 P720,000
Manufacturing overhead costs P250,000 P360,000

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 P2,700 P1,600
Direct labor cost P400 P900

Required:

1. Compute the manufacturing overhead allocation rate for each department.


2. Compute the total cost of Job #846.
3. Provide possible reasons why Hill Manufacturing uses two different cost allocation rates.

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