Question

James 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 $45 per machine hour, while the Sanding Department uses a departmental overhead rate of $15 per direct labor hour. Job 603 used thefollowing direct labor hours and machine hours in the two departments:Actual resultsDirect labor hours used Machine hours usedAssembly Sanding Department Department 7 4 11 7The cost for direct labor is $20 per direct labor hour and the cost of the direct materials used by Job 603 is $1,200. How much manufacturing overhead would be allocated to Job 603 using the departmental overhead rates?

Answer 1

Answer:

it wll apply 335 dollars of overhead

Explanation:

Assembly rate: 45 dollars per machine hour

Sanding rate 15 dollars per labor hour

On assembly we will only follow the machien hours to apply the overhead rate

On sanding we will apply based on labor hours on that department, we will ignore the rest.

Job 603

Machine hours on Assembly: 4 x 45 = 170

Labor hours on Sandings: 11 labor hours x 15 = 165

applied overhead using the deparmental overhead rate: 335