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

$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

Answer 1

Answer: C. $2,010

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.