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SHOW YOUR WORK !!! Babcock Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding.

SHOW YOUR WORK !!!

Babcock Industries 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 $20 per machine hour, while the Sanding Department uses a departmental overhead rate of $15 per direct labour hour. Job 396 used the following direct labour hours and machine hours in the two departments:

Actual results Assembly Department Sanding Department
Direct labour hours used 4 3
Machine hours used 9 5

The cost for direct labour is $25 per direct labour hour and the cost of the direct materials used by Job 396 is $1,200.

What was the total cost of Job 396 if Babcock Industries used the departmental overhead rates to allocate manufacturing overhead?

a.

$1,425

b.

$1,375

c.

$1,500

d.

$1,600

e.

$1,630

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