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 Assembly
Direct labor - hours 40,000 40,000
Machine - hours 50,000 20,000
Direct labor costs $500,000 $900,000
Manufacturing overhead costs $280,000 $360,000
The accounting records of the company show the following data for Job #316
Machine Assembly
Direct labor - hours 120 65
Machine - hours 50 5
Direct material cost $425 $175
Direct labor cost $275 $300
WHat are the total manufacturing costs for Job #316
Which of the following are correct? (Please show ALL calculations)
A. $2,040
B. $1,960
C. $1,175
D. $1,440

Answer 1

Answer:

See below

Explanation:

Total manufacturing cost = direct material cost + direct labor cost + manufacturing overhead cost

Where

Direct material cost = Machining direct material cost + assembly direct material cost

= $425 + $175

= $600

The direct labor cost = Machining direct labor cost + Assembly direct labor cost

= $275 + $300

= $575

The machining overhead cost = Manufacturing overhead costs / Machine hours

= $280,000 / 50,000

= $5.6

So, cost = $5.6 × 50 = $280

Assembly overhead cost = Manufacturing overhead costs / direct labor hours

= $360,000 / 20,000

= $18

So, the cost = $18 × 65 = $1,170

= $600 + $575 + $280 + $1,170

= $2,625