Bulla Corporation Has Two Production Departments, Machining and Customizing

question 296

Essay

Bulla Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
During the current month the company started and finished Job K369. The following data were recorded for this job:
Required:Calculate the total amount of overhead applied to Job K369 in both departments. (Do not round intermediate calculations.)

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Definitions:

Tangible Costs

Explicit expenses or outlays that are easily quantifiable and often involve monetary transactions, such as equipment purchases, rent, and salaries.

Intangible Costs

Expenses or costs that are not easily quantifiable, including things like brand value, intellectual property, or goodwill.

Variable Costs

Costs that change in direct proportion to sales.

Price Elastic

Refers to how sensitive the demand for a product is to changes in its price; high elasticity indicates demand significantly changes with price adjustments.