Question

Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs are allocated on the basis of​ machine-hours in the Machining Department and on the basis of direct​ labor-hours in the Assembly Department. At the beginning of​ 2018, the following estimates were provided for the coming​ year: Machining Assembly Direct​ labor-hours ​80,000 ​40,000 ​Machine-hours ​20,000 ​20,000 Direct labor cost ​$550,000 ​$900,000 Manufacturing overhead costs ​$480,000 ​$280,000 The accounting records of the company show the following data for Job​ #316: Machining Assembly Direct​ labor-hours 120 55 ​Machine-hours 50 5 Direct material cost ​$250 ​$150 Direct labor cost ​$125 ​$375 What are the total manufacturing costs of Job​ #316?

Answer 1

Answer:

The total manufacturing costs of Job​ #316 is $2,485

Explanation:

As we know that,

The total manufacturing cost = Direct material cost + direct labor cost + manufacturing overhead cost

where,

Direct material cost = Machining direct material cost + assemble direct material cost

= $250 + $150

= $400

The direct labor cost = Machining direct labor cost + assemble direct labor cost

= $125 + $375

= $500

The machining overhead cost equals to

= Manufacturing overhead costs ​÷ machine hours

= $480,000 ÷ 20,000

= $24

So, the cost = $24 × 50  = $1,200

And, The assembly overhead cost equals to

= Manufacturing overhead costs ​÷ direct labor hours

= $280,000 ÷ 40,000

= $7

So, the cost = $7 × 55  = $385

Now put these values to the above formula

So, the value equals to

=  $400 +  $500 + $1,200 + $385

= $2,485