Question

# Lucas Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has...

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

\$35

per machine​ hour, while the Sanding Department uses a departmental overhead rate of

\$20

per direct labor hour. Job 542 used the following direct labor hours and machine hours in the two​ departments:

 Actual results Assembly Department Sanding Department Direct labor hours used 7 3 Machine hours used 10 5

The cost for direct labor is

\$30

per direct labor hour and the cost of the direct materials used by Job 542 is

\$1,300.

What was the total cost of Job 542 if Lucas Industries used the departmental overhead rates to allocate manufacturing​ overhead?

A.

\$1,630

B.

\$1,930

C.

\$2,010

D.

\$ 1,600

Explanation:

Calculation of total cost of Job 542 if Lucas Industries used the departmental overhead rates to allocate manufacturing​ overhead:

 Particulars Job 542 Direct Material \$1,300 Direct labor (10 hours \$30) 300 Assembly Department Overhead (10 \$35) 350 Standard Department Overhead(3 ​​​​​​​ \$20) 60 Total \$2,010

For Assembly department Direct labor hours used and for Sanding Department Machine hours are used for Overhead allocation.

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