Gercak Corporation Has Two Production Departments, Forming and Assembly

question 327

Essay

Gercak Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly 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 X560. The following data were recorded for this job:
Required:a. Calculate the estimated total manufacturing overhead for the Assembly Department.b. Calculate the predetermined overhead rate for the Forming Department.c. Calculate the total amount of overhead applied to Job X560 in both departments.

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Definitions:

Disclosed

Made known or revealed, often in reference to information that was previously confidential or not publicly available.

Operating Segments

Components of an enterprise that engage in business activities from which they may earn revenues and incur expenses, including revenues and expenses related to transactions with other components of the same enterprise.

Similar Economic Characteristics

A term used in financial analysis and consolidation to refer to entities or segments within enterprises that share similar economic environments, risks, and returns.

Combined

In financial terms, refers to the aggregation of financial data from several departments or business entities within a corporation to provide a complete financial profile.