Question

Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to proudcts. Mnaufacturing overhead costs are allocated on the the bases of Macine hours in the Machining Department on the bases of direct labor hours. In the Assembly Department. At the beginning of 2018, the following estimates were provided for the coming year: Machining AssemblyDirect labor - hours 40,000 40,000Machine - hours 50,000 20,000Direct labor costs $500,000 $900,000Manufacturing overhead costs $280,000 $360,000The accounting records of the company show the following data for Job #316 Machine AssemblyDirect labor - hours 120 65Machine - hours 50 5Direct material cost $425 $175Direct labor cost $275 $300WHat are the total manufacturing costs for Job #316Which of the following are correct? (Please show ALL calculations)A. $2,040B. $1,960C. $1,175D. $1,440

Answer 1

Answer:

2040.

Explanation:

To reach the total manufacturing cost we need to calculate machining and assembling overhead rate first, in order to calculate the rate we need to divide manufacturing overhead cost on number of hours

Machining OH rate = 280000 / 50000 = 5.60  

Assembling OH rate = 360000/40000 = 9.00

 

manufacturing cost:    

                    machine Assembly Total  

Material  425                175             600  

labor               275                300             575  

Overhead                                                 865  

(50*5.60)       280

(65*9)             585            

Total cost                                               2040