Crane Fabrication allocates manufacturing overhead to each job using departmental overhead rates. Crane's operations are divided into a metal casting department and a metal finishing department. The casting department uses a departmental overhead rate of $51 per machine hour, while the finishing department uses a departmental overhead rate of $25 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 $42 per direct labor hour and the cost of the direct materials used by Job A216 is $2000.
What was the total cost of Job A216 if Crane Fabrication used the departmental overhead rates to allocate manufacturing overhead?
A)$2378
B)$2924
C)$3427
D)$3682

Question

Crane Fabrication allocates manufacturing overhead to each job using departmental overhead rates. Crane's operations are divided into a metal casting department and a metal finishing department. The casting department uses a departmental overhead rate of $51 per machine hour, while the finishing department uses a departmental overhead rate of $25 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 $42 per direct labor hour and the cost of the direct materials used by Job A216 is $2000.
What was the total cost of Job A216 if Crane Fabrication used the departmental overhead rates to allocate manufacturing overhead?
A)$2378 
B)$2924 
C)$3427 
D)$3682

Quizplus · Accepted Answer

The total manufacturing overhead cost allocated to Job A216 in the casting department is:

$51 per machine hour x 3 machine hours = $153

The total manufacturing overhead cost allocated to Job A216 in the finishing department is:

$25 per direct labor hour x 6 direct labor hours = $150

Therefore, the total manufacturing overhead cost allocated to Job A216 is $153 + $150 = $303.

The total cost of Job A216 is:

Direct materials cost + Direct labor cost + Manufacturing overhead cost
= $2000 + ($42 per direct labor hour x 6 direct labor hours) + $303
= $2000 + $252 + $303
= $2555

Therefore, the best choice is C) $3427, which is not provided in the answer choices. This suggests that there may be an error in the question or answer choices.

Crane Fabrication Allocates Manufacturing Overhead to Each Job Using Departmental