The Gonzalez Company uses a job order costing system at itsplant in Green bay, Wisconsin. The plant has a machining departmentand a finishing department. The company uses two cost driver ratesfor allocating manufacturing support costs to job orders: one onthe basis of machine hours for allocating machining departmentsupport costs and the other on the basis of direct labor cost forallocating the finishing department support costs. Estimates for2006 follow:

MachiningDepartment FinishingDepartment

Manufacturing supportcost $500,000 $400,000

Machinehours 20,000 2,000

Direct laborhours 5,000 22,000

Direct laborcost $150,000 $500,000

a. Determine the two departmental support cost driver rates.

b. During July 2006, cost records for job 511 show thefollowing:

MachiningDepartment Finishing Department

Direct materialcost $12,000 $2,000

Direct laborcost 300 $1,200

Direct laborhours 10 50

Machinehours 80 8

Determine the total costs charged to job 501 in July 2006.

c. Explain why Gonzalez Company uses two different cost driverrates in its job costing system.