Bauer Manufacturing uses departmental cost driver rates to allocate manufacturin
ID: 2606959 • Letter: B
Question
Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to proudcts. Mnaufacturing overhead costs are allocated on the the bases of Macine hours in the Machining Department on the bases of direct labor hours. In the Assembly Department. At the beginning of 2018, the following estimates were provided for the coming year:
Machining Assembly
Direct labor - hours 40,000 40,000
Machine - hours 50,000 20,000
Direct labor costs $500,000 $900,000
Manufacturing overhead costs $280,000 $360,000
The accounting records of the company show the following data for Job #316
Machine Assembly
Direct labor - hours 120 65
Machine - hours 50 5
Direct material cost $425 $175
Direct labor cost $275 $300
WHat are the total manufacturing costs for Job #316
Which of the following are correct? (Please show ALL calculations)
A. $2,040
B. $1,960
C. $1,175
D. $1,440
Thanks.
Explanation / Answer
Calculate overhead rate :
Machine department = 280000/50000 = 5.6 per machine hour
Assembly department = 360000/40000 = 9 per labour hour
Calculate total manufacturing costs for Job #316 :
so answer is a) $2,040
Machine : Direct material 425 Direct labour 275 Manufacturing overhead (50*5.6) 280 Assembly : Direct material 175 Direct labour 300 Manufacturing overhead (65*9) 585 Total manufacturing cost 2040Related Questions
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