Question 7

Time: 20 minutes

Total: 13 marks

Bobs Electronics Inc. manufactures high-tech screens for computers. In June, the two production departments had budgeted allocation bases of 13,200 machine hours in Department 1 and 7,300 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $56,760 and $41,610, respectively. For Job 101, 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

12,500

9,100

Direct manufacturing labour

32,500

32,200

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 101 incurred 1,720 machine hours in Department 1 and 930 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production.

15. What is the budgeted indirect cost allocation rate for Department 1?(4 marks)

16. What is the budgeted indirect cost allocation rate for Department 2?(4 marks)

17. What is the total cost assigned to Job 101 based on normal costing?(5 marks)

Time: 20 minutes Total: 13 marks Bob's Electronics Inc. manufactures high-tech screens for computers. In June, the two production departments had budgeted allocation bases of 13,200 machine hours in Department 1 and 7,300 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $56,760 and $41,610, respectively. For Job 101, the actual costs incurred in the two departments were as follows: Department Department 2 Direct materials purchased on account S66,000 S106,500 Direct materials used 12.500 9.100 Direct manufacturing labour 32,500 32.200 Indirect manufacturing labour 6,600 5.400 Indirect materials used Lease on equipment 9.750 2.250 Utilities 600 750 Job 101 incurred 1,720 machine hours in Department 1 and 930 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production. 15. What is the budgeted indirect cost allocation rate for Department 1? (4 marks) 16. What is the budgeted indirect cost allocation rate for Department 2? (4 marks) 15. What is the budgeted indirect cost allocation rate for Department 1? (4 marks) 16. What is the budgeted indirect cost allocation rate for Department 2? (4 marks) 17. What is the total cost assigned to Job 101 based on normal costing