26.07.2022 - 10:36

# Maple Street Furniture uses departmental overhead rates (rather than a plantwide overhead rate) to allocate its manufacturing overhead to jobs. The company’s two production departments have the follow

Question:

Maple Street Furniture uses departmental overhead rates (rather than a plantwide overhead rate) to allocate its manufacturing overhead to jobs. The company’s two production departments have the following departmental overhead rates:

Cutting Department $12 per machine hour Finishing Department$15 per direct labor hour

1. How much manufacturing overhead should be allocated to Job 484?

2. Assume that direct labor is paid at a rate of $26 per hour and Job 484 used$2,550 of direct materials. What was the total manufacturing cost of Job 484?

Requirement:

1. How much manufacturing overhead should be allocated to Job 484? Calculate the total manufacturing overhead for the job by using a formula for each department’s overhead amount and then adding both amounts together. First determine the formula and overhead for the Cutting Department.

x =

Job 484 used the following direct labor hours and machine hours in the two manufacturing departments:

JOB 484 Cutting Department Finishing Department
Direct labor hours 4 5
Machine hours 9 5
• To calculate the manufacturing overhead allocated to Job 484, we first need to determine the overhead amount for each department. For the Cutting Department: Overhead rate = $12 per machine hour Job 484 used 9 machine hours in this department Overhead amount =$12 x 9 = $108 For the Finishing Department: Overhead rate =$15 per direct labor hour Job 484 used 5 direct labor hours in this department Overhead amount = $15 x 5 =$75 Total manufacturing overhead allocated to Job 484 = $108 +$75 = $183 2. To calculate the total manufacturing cost of Job 484, we need to add the manufacturing overhead allocated in step 1 to the direct materials and direct labor cost for the job. Direct materials cost for Job 484 =$2,550 Direct labor cost for Job 484 = 4 x $26 per hour + 5 x$26 per hour = $234 Total manufacturing cost for Job 484 =$2,550 + $234 +$183 = \$2,967