Question

Lucas 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 $65 per machine hour, while the Sanding Department uses a departmental overhead rate of $15 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two departments: Actual results Assembly Department Sanding Department Direct labor hours used 6​ 3​ Machine hours used 10​ 9​ The cost for direct labor is $25 per direct labor hour and the cost of the direct materials used by Job 542 is $1600. What was the total cost of Job 542 ifLucas Industries used the departmental overhead rates to allocate manufacturing overhead

Answer 1

Total cost= $2520

Step-by-step explanation:

Giving the following information:

The Assembly Department uses a departmental overhead rate of $65 per machine hour, while the Sanding Department uses a departmental overhead rate of $15 per direct labor hour.

Job 603:

Assembly; 6 direct labor hours and 10 machine-hours.

Sanding; 3 direct labor hours and 9 machine hours.

The cost for direct labor is $25 per direct labor hour and the cost of the direct materials used by Job 603 is $1600.

Total cost= direct materials + direct labor + manufacturing overhead

Direct labor= 9*25= $225

Overhead= (10*65) + (3*15)= 695

Total cost= 1600 + 225 + 695= $2520