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Problem - Company X has two departments, A and B. Overhead is applied based on machine hours in Department A. Overhead is applied based on direct labor hours in Department B.
Budgeted Amounts
Department A
Department B
Direct labor hours
20,000
90,000
Machine hours
10,000
50,000
Direct materials costs
$60,000
$720,000
Direct labor costs
$30,000
$840,000
Manufacturing overhead costs
$210,000
$360,000
The accounting records for Job M
50
100
110
20
$2,600
$1,400
$1,600
Required -
1. Calculate the overhead allocation rate for Department A?
2. Calculate the overhead allocation rate for Department B?
3. Calculate the total allocated overhead cost of Job M?
4. Calculate the total cost of Job M?
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