Question

ZZ Inc. 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 $30 per direct labor hour. Job 600 used the following direct labor hours and machine hours in the two departments: Actual results..................Assembly Department..........Sanding Department Direct labor hours used...................9..........................................6 Machine hours used.........................9.........................................7 The cost for direct labor is $35 per direct labor hour and the cost of the direct materials used by Job 600 is $1500. What was the total cost of Job 600 if ZZ Inc. used the departmental overhead rates to allocate manufacturing overhead?

Answer 1

Answer:

$2,745

Explanation:

Given that,

Direct labor hours used:

Assembly Department = 9

Sanding Department = 6

Machine hours used:

Assembly Department = 9

Sanding Department = 7

Cost for direct labor = $35 per direct labor hour

cost of the direct materials used = $1,500

Total cost of Job 600:

= Direct labor + Direct material + Assembly department overhead + Standard department overhead

= [(9 + 6) DLH × $35] + $1,500 + ($60 × 9) + ($30 × 6)

= $525 + $1,500 + $540 + $180

= $2,745