90.2K

Verified Solution

Link Copied!

Use the information below to answer the following question(s).

Jim's Computer Products manufactures keyboards for computers. In June, the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2. The budgeted manufacturing overheads for the month were $34,500 and $37,500, respectively. For Job 501, 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

19,500

8,100

Direct manufacturing labour

31,500

32,100

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 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2. The company uses a budgeted departmental overhead rate for applying overhead to production.

16) What is the budgeted indirect cost allocation rate for Department 1?

A) $3.45 per hour

B) $3.75 per hour

C) $6.90 per hour

D) $7.50 per hour

E) $8.00 per hour

17) What is the budgeted indirect cost allocation rate for Department 2?

A) $3.45

B) $3.75

C) $4.60

D) $7.50

E) $8.00

18) What is the total cost assigned to Job 501 based on normal costing?

A) $27,600

B) $91,200

C) $96,900

D) $123,900

E) $126,500

Answer & Explanation Solved by verified expert

See Answer