Custom Company has two manufacturing departments - Fabrication and Finishing. The predetermined overhead rates in Fabrication and Finishing are $19.00 per direct labour hour and 120% of direct materials cost, respectively. The direct labour wage rate is $17.00 per hour in Fabrication. The following information is on Job 800: Fabrication Finishing Direct materials $420 $70 Direct labour $153 $57 Required: a. What is the total manufacturing cost assigned to Job 800? (2 marks) b. Why do companies use predetermined overhead rates rather than actual manufacturing costs to apply overhead to jobs?

Answer rating: 100% (QA)

a To calculate the total manufacturing cost assigned to Job 800 we need to determine the overhead cost for each department and add it to the direct ma... View the full answer