Answer:
Total cost= $207,000
Explanation:
Giving the following information:
Budgeted manufacturing costs Dept. M Dept. A:
Direct labor 218,000 836,000
Factory overhead 654,000 418,000
Job. No. 432:
Direct materials $58,000
Direct labor: Department M$26,000 Department A 30,000
<u>First, we need to determine the predetermined overhead rate for each department:</u>
<u></u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Departement M= 654,000/218,000= $3 per direct labor dollar
Department A= 418,000/836,000= $0.5 per direct labor dollar
<u>Now, we can calculate the total cost:</u>
Total cost= direct material + direct labor + allocated overhead:
Total cost= 58,000 + 56,000 + (3*26,000 + 0.5*30,000)
Total cost= $207,000
