Question

A factory uses the sequential method to allocate support department costs. Job 23 required 50 machine hours in the Cutting Department and 10 direct labor hours in the Assembly Department. Total direct materials cost was $1,500, and total direct labor cost was $200. If the overhead rate of the Cutting Department is $4.5 per machine hour and the Assembly Department is $5.5 per direct labor hour, calculate the cost of Job 23.

a.$1,980
b.$2,000
c.$1,700
d.$1,925

Answer 1

The total cost of Job 23, calculated using the sequential method for allocating support department costs, is $1,980, which includes direct materials, direct labor, and overheads from both the Cutting and Assembly Departments.

Step-by-step explanation:

To calculate the cost of Job 23 using the sequential method to allocate support department costs, we need to add direct materials costs, direct labor costs, and overhead costs from the Cutting and Assembly Departments.

• Direct Materials Cost: $1,500
• Direct Labor Cost: $200
• Overhead from the Cutting Department: 50 machine hours * $4.5 per machine hour = $225
• Overhead from Assembly Department: 10 direct labor hours * $5.5 per direct labor hour = $55

Adding these amounts together, we get:

Total Cost of Job 23 = Direct Materials Cost + Direct Labor Cost + Cutting Overhead + Assembly Overhead

Total Cost of Job 23 = $1,500 + $200 + $225 + $55

Total Cost of Job 23 = $1,980

Therefore, the correct answer is a. $1,980.