Question

m/courses/1262813/quizzes/3056451/take/questions/44191369 ... Q Demand-pull inflati. Dashboard Question 3 2 pts Luster, LLC uses a single, plant-wide overhead rate. The company has two departments, fabrication and painting. Relevant data is below. Fabrication department: $12,000 fixed overhead, variable overhead $18 per labor hour Painting department: $28,000 fixed overhead, variable $9 per machine hour The company estimated the following hours: Fabrication department: 900 labor hours and 1,000 machine hours Painting department: 1.200 labor hours and 300 machine hours The single, plant-wide overhead rate is based on machine hours. Job A2B3 incurred the following: $280 direct materials, $330 direct labor, 18 labor hours, and 9 machine hours. What is the total cost of Job A2B3? $1.425.58 $1,017.79 $610.00 $1.114.90

Answer 1

Solution : calculation of total overhead :-

Fabrication department :

Fixed overhead. $ 12,000

Variable overhead. $ 16,200 ($ 18 X 900)

Total overhead. $ 28,200

Overhead rate per machine hour = $ 28,200 / 1000 = $ 28.20

Painting department :

Fixed overhead. $ 28,000

Variable overhead $ 2,700

Total overhead. $ 30,700

Overhead rate per machine hour = $ 30,700 / 300 = $ 102.33

Total cost of job A2B3 :

Direct material. $ 280.00

Direct labour. $ 330.00

Overhead cost. $ 407.79 ( $ 45.31 X 9 m/c hr)

______________

Total cost. $ 1,017.79

Working :

Total overhead cost of fabrication department = $ 28,200

Total overhead cost of painting department. = $ 30,700

______________

Total $ 58,900

Total machine hrs :

Fabrication department = 1000 hrs

Painting department = 300 hrs

Total. = 1300 hrs

Overhead rate per hr = $ 58,900 / 1300 hrs = $ 45.31