Question: What is the budgeted indirect cost allocation rate for Department 1?

1) 3.75/hr

2) 7.5/hr

3) 3.45/hr

4)8/hr

5)6.9/hr

Problem 1 Jim's Computer Products manufactures keyboards for computers. In June, the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $34,500 and $37,500, respectively. For Job 501, the actual costs incurred in the two departments: Department 1 Department 2 Direct materials purchased on account Direct materials used Direct manufacturing labour Indirect manufacturing labour Indirect materials used Lease on equipment Utilities $66,000 19,500 31,500 6,600 4,500 9,750 600 $106,500 8,100 32,100 5,400 2,850 2,250 750 Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production