Use departmental overhead rates to allocate manufacturing overhead (Learning Objective:

Whitney 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: $9 per machine hour

Finishing Department: $18 per direct labor hour

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 2 7

Machine Hours 8 4

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

2. Assume that direct labor is paid at a rate of $24 per hour and Job 484 used $2,400 of direct materials. What was the total manufacturing cost of Job 484?

Question

London

Business

16 September, 04:57

Use departmental overhead rates to allocate manufacturing overhead (Learning Objective:

Whitney 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: $9 per machine hour

Finishing Department: $18 per direct labor hour

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 2 7

Machine Hours 8 4

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

2. Assume that direct labor is paid at a rate of $24 per hour and Job 484 used $2,400 of direct materials. What was the total manufacturing cost of Job 484?

+3

Answers (2)

Know the Answer?

Nikhil Bell · Answer 1

1. Manufacturing overhead charged to Job 484 is $ 198

2. Total manufacturing costs for job 484 is $2,814

Explanation:

Computation of overhead for Job 484

Cutting department based on machine hours

$ 9 per machine hour * 8 hours $ 72

Finishing department on Direct Labor hours

$ 18 per direct labor hour * 7 hours $ 126

Total overhead for Job 484 $ 198

Computation of total manufacturing costs for Job 484

Direct labor Total hours used

Cutting Department 2 hours

Finishing department 7 hours

Total hours - Direct Labor 9 hours

Hourly rate $ 24 per hour

Total Direct Labor Cost $ 24 * 9 hours $ 216

Direct Materials $ 2,400

Manufacturing overhead applied $ 198

Total manufacturing costs for job 484 $ 2,814

Kenna Foster · Answer 2

The overhead allocated to job 484 is $198

Total manufacturing cost is $2814

Explanation:

Computation of job 484 overhead:

In cutting department overhead is $9*8=$72

In finishing department is $18*7 = $126

Total overhead $198

If direct labor is paid $24 per hour, the direct labor cost on job 484 is computed thus:

Total labor hours used by the job=2+7=9 hours

Total direct labor cost=9*$24=$216

Hence total manufacturing cost on the job is calculated as:

Direct materials $2400

Direct labor cost $216

Overhead $198

$2814