Homework assignment 2: Ptolemeus SA In Tutorial Library

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TITLE: Homework assignment 2: Ptolemeus SA

CLASS / COURSE: Management Accounting

QUESTION DESCRIPTION:

 

Ptolemeus SA uses a job-costing system in its Chalandri plant. The plant has a Machining Department and an Assembly Department. Its job-costing system has two direct cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the Machining Department, allocated using actual machine hours, and the Assembly Department, allocated using actual labor cost). The
2008 budget for the plant is as follows:
 
Machining Department Assembly Department
Manufacturing overhead €900,000 €1,800,000
Direct manufacturing labor cost €700,000 €1,000,000
Direct manufacturing labor hours 50,000 hours 100,000 hours
Machine hours 25,000 hours 100,000 hours
 
Required:
 
1. Calculate the budgeted overhead rates for the Machine Department and the Assembly Department.
During the month of April, the cost record for Job 6651 shows the following:
 
Machining Department Assembly Department
Direct material used €22,500 €35,000
Direct manufacturing labor cost €7,000 €7,500
Direct manufacturing labor hours 500 hours 750 hours
Machine hours 1000 hours 500 hours
 
2. What is the total manufacturing overhead allocated to Job 6651?
Balances at the end of 2008 are as follows:
 
Machining Department Assembly Department
Manufacturing overhead incurred €1,050,000 €1,850,000
Direct manufacturing labor cost 0 €1,100,000
Machine hours 27,500 hours 0
 
3. Calculate the over- or underallocated manufacturing overhead for each
department.

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SUBJECTS / CATEGORIES:
1. Finance
2. Financial Management
3. Accounting

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