Use departmental overhead rates to allocate manufacturing overhead

(Learning Objective 1)

Quality Furniture uses departmental overhead rates (rather than a plantwide over¬ head rate) to allocate its manufacturing overhead to jobs. The company’s two produc¬ tion departments have the following departmental overhead rates:

Job 392 used the following direct labor hours and machine hours in the two manufac¬ turing departments:

1. How much manufacturing overhead should be allocated to Job 392.-'
2. Assume that direct labor is paid at a rate of $25/hour and Job 392 used $2,500 of direct materials. What was the total manufacturing cost of Job 392?

Transcribed Image Text:

Cutting Department: $10 per machine hour Finishing Department: $17 per direct labor hour