Billabong Resources Provides the Following Data to Enable You to Calculate

question 71

Essay

Billabong Resources provides the following data to enable you to calculate overhead rates: Machining Department Overhead is $16,000, which is to be allocated on estimated machine hours of 25,000. The rate per Machine Hour would be _________________. If Machining cost is to be allocated to three jobs which consumed A = 3,000 hours, B = 6,000 hours, and C = 1,000 hours respectively; then Job A should be charged $__________________; Job B should be charged $___________________; and Job C $_______________.

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Definitions:

Materials

The substances or components used in the manufacturing of products or provision of services.

Assembly Department

This refers to the section of a manufacturing facility where products are assembled from individual parts or components.

Weighted-Average Method

A costing method that assigns costs to inventory based on the average cost of all similar items in the inventory.

Process Costing

An accounting method used to calculate the cost of a process or stage of production by dividing the total costs by the number of units produced, typically used in industries where identical products are produced.