Question

Pigot Corporation uses job costing and has two production departments, M and A. Budgeted manufacturing costs for the year are as follows: Dept. M Dept. A Direct materials $ 700,000 $ 100,000 Direct labor 200,000 800,000 Factory overhead 600,000 400,000 The actual direct materials and direct labor costs charged to Job. No. 432 during the year were as follows: Direct materials $ 25,000 Direct labor: Department M $ 8,000 Department A 12,000 20,000 Pigot applies manufacturing overhead to production orders on the basis of direct labor cost using departmental rates predetermined at the beginning of the year based on the annual budget. The total cost associated with Job. No. 432 for the year should be:a.$165,000 b.$146,500 c.$143,500 d.$200,500

Answer 1

Answer:

Correct option is D.

$200,500

Explanation:

Manufacturing overhead = [($651,000/217,000) × $25,000] + [($417,000/834,000) × $29,000] = $89,500

Total cost associated with Job. No. 432 = $57,000 + $54,000 + $89,500 = $200,500