Ryan Fabrication allocates manufacturing overhead to each job using departmental overhead rates. Ryan's operations are divided into a metal casting department and a metal finishing department. The casting department uses a departmental overhead rate of $52 per machine hour, while the finishing department uses a departmental overhead rate of $28 per direct labor hour. Job A216 used the following direct labor hours and machine hours in the two departments: The cost for direct labor is $32 per direct labor hour and the cost of the direct materials used by Job A216 is $1,800.
What was the total cost of Job A216 if Ryan Fabrication used the departmental overhead rates to allocate manufacturing overhead?
A)$2,434
B)$2,344
C)$2,888
D)$2,940

Question

Ryan Fabrication allocates manufacturing overhead to each job using departmental overhead rates. Ryan's operations are divided into a metal casting department and a metal finishing department. The casting department uses a departmental overhead rate of $52 per machine hour, while the finishing department uses a departmental overhead rate of $28 per direct labor hour. Job A216 used the following direct labor hours and machine hours in the two departments:  The cost for direct labor is $32 per direct labor hour and the cost of the direct materials used by Job A216 is $1,800.
What was the total cost of Job A216 if Ryan Fabrication used the departmental overhead rates to allocate manufacturing overhead?
A)$2,434 
B)$2,344 
C)$2,888 
D)$2,940

Quizplus · Accepted Answer

Firstly, we need to allocate manufacturing overhead to Job A216 using departmental overhead rates.

For the metal casting department:
Manufacturing overhead cost for Job A216 = Departmental overhead rate x Machine hours used
Manufacturing overhead cost for Job A216 = $52 x 4 = $208

For the metal finishing department:
Manufacturing overhead cost for Job A216 = Departmental overhead rate x Direct labor hours used
Manufacturing overhead cost for Job A216 = $28 x 8 = $224

Total manufacturing overhead cost for Job A216 = $208 + $224 = $432

Next, we need to calculate the total cost of Job A216, which includes direct materials, direct labor, and manufacturing overhead.

Direct materials cost = $1,800
Direct labor cost = Direct labor rate x Direct labor hours
Direct labor cost = $32 x 8 = $256

Total cost of Job A216 = Direct materials cost + Direct labor cost + Manufacturing overhead cost
Total cost of Job A216 = $1,800 + $256 + $432 = $2,488

Therefore, the answer is:
Answer: C

Ryan Fabrication Allocates Manufacturing Overhead to Each Job Using Departmental