Question - Babcock Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $20 per machine hour, while the Sanding Department uses a departmental overhead rate of $15 per direct labour hour. Job 396 used the following direct labour hours and machine hours in the two departments:
|
Actual results
|
Assembly Department
|
Sanding Department
|
|
Direct labour hours used
|
4
|
3
|
|
Machine hours used
|
9
|
5
|
The cost for direct labour is $25 per direct labour hour and the cost of the direct materials used by Job 396 is $1,200.
What was the total cost of Job 396 if Babcock Industries used the departmental overhead rates to allocate manufacturing overhead?
a. $1,425
b. $1,375
c. $1,500
d. $1,600
e. $1,630