Question
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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