Question

Lucas Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two​ departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $ 60 per machine​ hour, while the Sanding Department uses a departmental overhead rate of $ 20 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two​ departments:
Direct labor hours usedAssembly Department - 8
Sanding Department - 5
Machine hours used
Assembly Department - 10Sanding Department - 7
The cost for direct labor is $32 per direct labor hour and the cost of the direct materials used by Job 603 is $1351.
What was the total cost of Job 603 if James Industries used the departmental overhead rates to allocate manufacturing overhead?

Answer 1

Answer:

Total cost= $2467

Explanation:

Giving the following information:

The Assembly Department uses a departmental overhead rate of $ 60 per machine​ hour.

The Sanding Department uses a departmental overhead rate of $ 20 per direct labor hour

Direct labor hours used

Assembly Department - 8

Sanding Department - 5

Machine hours used

Assembly Department - 10

Sanding Department - 7

The cost for direct labor is $32 per direct labor hour and the cost of the direct materials used by Job 603 is $1351.

Total cost= direct material + direct labor + MOH

Total cost= 1351 + (13*32) + (60*10 + 20*5)= $2467