Ryan Fabrication allocates manufacturing overhead to each job using departmental overhead rates. Ryan's operations are divided into a metal casting department and a metal finishing department
The casting department uses a departmental overhead rate of $52 per machine hour, while the finishing department uses a departmental overhead rate of $28 per direct labor hour. Job A216 used the following direct labor hours and machine hours in the two departments:
Actual results Casting Department Finishing Department
Direct labor hours used 5 12
Machine hours used 4 3
The cost for direct labor is $32 per direct labor hour and the cost of the direct materials used by Job A216 is $1,800.
How much manufacturing overhead would be allocated to Job A216 using the departmental overhead rates?
A) $544
B) $596
C) $1,360
D) $454
A
Explanation: A)
Casting Dept. $52 × 4 machine hrs = $208.00
Finishing Dept. $28 × 12 direct hrs = $336.00
Total $544.00
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