Question

Job #335 requires work in the following departments: Machining: 4 hours (all automated) Sanding: 1 hour (all direct labor) Painting: 2 hours (including dry time of 1.5 hours) The company uses departmental overhead rates. Overhead is allocated at the rate of $6/direct labor hour in Sanding, and $15/machine hour in Machining. Painting overhead is allocated on the basis of total time in the department and is allocated at a rate of $3/hour. How much overhead is allocated to the job?

Answer 1

$72

Explanation:

For computation of overhead is allocated to the job first we need to find out the each department of manufacturing overhead allocated which is shown below:-

Manufacturing overhead allocated for Machining = Machine hours × Departmental overhead rate

= 4 × $15

= $60

Manufacturing overhead allocated for Sanding = Machine hours × Departmental overhead rate

= 1 × $6

= $6

Manufacturing overhead allocated for Painting = Machine hours × Departmental overhead rate

= 2 × $3

= $6

So, Total overhead is allocated to the job = Manufacturing overhead allocated for Machining + Manufacturing overhead allocated for Sanding + Manufacturing overhead allocated for Painting

= $60 + $6 + $6

= $72