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Bobs Electronics Inc. manufactures high-tech screens for computers. In June, the two production departments had...

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Accounting

Bobs Electronics Inc. manufactures high-tech screens for computers. In June, the two production departments had budgeted allocation bases of 13,000 machine hours in Department 1 and 7,100 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $55,900 and $41,890, 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 1,600 machine hours in Department 1 and 900 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production.

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

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

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

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