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?
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||=||Cutting Department overhead|
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|