James Industries uses departmental overhead rates to allocate its manufacturing

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 $34 per machine hour, while the Sanding Department uses a departmental overhead rate of $21 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two departments: Assembly Sanding Department Department Direct labor hours used Machine hours used 10 The cost for direct labor is $31 per direct labor hour and the cost of the direct materials used by Job 603 is $1362. What was the total cost of Job 603 if James Industries used the departmental overhead rates to allocate manufacturing overhead? 2252.0000 2210.0 margin of error +/-10.0

Explanation / Answer

Calculate total cost of job 603 :

Job 603 Direct material 1362 Direct labour (8+5)*31 403 Assembly department overhead (34*10) 340 Sanding department overhead (5*21) 105 Total cost of job 603 2210

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