Leonard Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two
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Question:
Leonard Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments, Building and Inspection. The Building Department uses a departmental overhead rate of $18 per machine hour, while the Inspection Department uses a departmental overhead rate of $15 per direct labour hour. Job 611 used the following direct labour hours and machine hours in the two departments:
Actual results | Building Department | Inspection Department |
Direct labour hours used | 6 | 3 |
Machine hours used | 12 | 0 |
The cost for direct labour is $25 per direct labour hour and the cost of the direct materials used by Job 611 is $1,500. What was the total cost of Job 611 if Leonard Industries used the departmental overhead rates to allocate manufacturing overhead?
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