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Sheppard Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs are allocated on the basis of machine hours
Sheppard Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs are allocated on the basis of machine hours in the Machining Department and on the basis of direct labor hours in the Assembly Department. At the beginning of 2011, the following estimates were provided for the coming year: Machining Assembly Direct labor cost $500,000 $900,000 Manufacturing overhead costs $420,000 $240,000 Direct labor - hours 30,000 60,000 Machine - hours 80,000 20,000 The accounting records of the company show the following data for Job #316: Machining Assembly The accounting records of the company show the following data for Job #316: Machining Assembly Direct labor - hours 120 70 Machine - hours 60 5 Direct material cost $300 $200 Direct labor cost $100 $400 For the Machining Department, what is the annual manufacturing overhead cost driver rate? $4.20 per machine hour $4.67 per machine hour For the Machining Department, what is the annual manufacturing overhead cost driver rate? $4.20 per machine hour $4.67 per machine hour $4.00 per machine hour $5.25 per machine hour
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