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 $50 per machine hour, while the Sanding Department uses a departmental overhead rate of $25 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two departments:_______.

Assembly Actual results Direct labor hours used Machine hours used The cost for direct labor is $30 per direct labor hour and the cost of the direct materials used by Job 603 is $1,400.
How much manufacturing ovehead would be allocated to Job 603 using the departmental overhead rates?
A. $610
B. $330
C. $580
D. $740

Answer 1

A. $610

Step-by-step explanation:

The computation of the manufacturing overhead allocated is shown below:

= $50 per machine hour × 11 machine hours used + $15 per direct labor hour × 4 direct labor hour used

= $550 + $60

= $610

Hence, the manufacturing overhead allocated is $610