Question
Cabinets Unlimited uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses
Cabinets Unlimited 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 $40 per machine hour, while the Sanding Department uses a departmental overhead rate of $25 per direct labor hour. Job 542 used the following direct labor hours and machine hours in the two departments:
Actual results | Assembly Department | Sanding Department |
Direct labor hours used | 7 | 3 |
Machine hours used | 9 | 8 |
The cost for direct labor is $20 per direct labor hour and the cost of the direct materials used by Job 542 is $1500. What was the total cost of Job 542 if Lucas Industries used the departmental overhead rates to allocate manufacturing overhead?
A. $2135
B. $1700
C. $2300
D. $1720
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