The Watts Company uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labour cost. The following estimates were made at the beginning of the year and the actuals were recorded at the end of the year:

Estimates Actuals

Direct labour cost $30,000 $35,000

Manufacturing overhead $60,000 $77,000

Direct labour hours 6,000 7,000

Machine hours 2,000 4,000

Job 406 was completed on December 31. It contained $400 in DM, and $970 in DL. It required 49 DLH and 12 MH. What was the cost of Job 406?

Multiple Choice

• $1,940
• $3,310
• $3,504
• $2,134