Jim's Computer Products manufactures keyboards for computers. In June, the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $34,500 and $37,500, respectively. For Job 501, the actual costs incurred in the two departments were as follows:

	Department 1	Department 2
Direct materials purchased on account	$66,000	$106,500
Direct materials used	19,500	8,100
Direct manufacturing labour	31,500	32,100
Indirect manufacturing labour	6,600	5,400
Indirect materials used	4,500	2,850
Lease on equipment	9,750	2,250
Utilities	600	750

 

Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production.

1. What is the budgeted indirect cost allocation rate for Department 1?

2. What is the budgeted indirect cost allocation rate for Department 2?

3. What is the total cost assigned to Job 501 based on normal costing?

Answer rating: 100% (QA)

1 The budgeted indirect cost allocation rate for Department 1 can be calculated using the given information as follows Budgeted manufacturing overheads for Department 1 34500 Budgeted allocation base ... View the full answer