NAME COMPREHENSIVE PROBLEM 5
Textbook page 949 DATE THE GILSTER COMPANY
Plant wide overhead rate using direct labor hours:
Overhead Rate (formula) =

= $_______ per direct labor hour
Total manufacturing cost per unit for Job 110:
_________________________ $_______________
_________________________ ________________
_________________________ ________________
_________________________ ________________
Total Cost $_________________
Total cost/unit = ________________ = $__________ per unit
Plant wide Overhead Rate:
Using Machine Hrs (formula) =

= $_______ per machine hour
Overhead Rate:
Department A (formula) =

= $_______ per machine hour
Department B (formula) =

= $_______ per machine hour
Total manufacturing cost per unit for Job 110:
_________________________ $_______________
_________________________ ________________
_________________________ ________________
_________________________ ________________
_________________________ ________________
_________________________ ________________
Total Cost $_________________
Total cost/unit = ________________ = $__________ per unit
COMPREHENSIVE PROBLEM 5 THE GILSTER COMPANY (continued)
Bid price for Job 110 (plant wide rate):
Bid price for Job 110 (separate overhead rates):
The bids differ due to the differences in manufacturing overhead that are applied to the job using the two allocation methods. The overhead differences are due to
(1)_________________________________________________________________________and
(2)_________________________________________________________________________
The allocation scheme employed in part b. would be recommended because the departmental overhead is due mostly to machine-related expenses and the use of multiple overhead rates allows for allocation that more closely resembles the use of resources.
Applied overhead based on machine hours:
Plant wide (__________________________________)…