McCloskey Manufacturing Ltd. uses a normal job order costing system. Each unit p
ID: 2386615 • Letter: M
Question
McCloskey Manufacturing Ltd. uses a normal job order costing system. Each unit produced must pass through two different processes. Overhead is applied to each unit on direct labor hours in Dept. A. and machine hours in Dept. B. Budgeted data for the two departments are as follows: Dept. A Dept. B Budgeted overhead $510,900 $434,720 Budgeted activity: Direct labor hours (DLH) 26,000 42,500 Machine hours (MH) 10,500 76,000 Direct labor wage rate $25 per DLH $22 per DLH The following data pertains to Job A-402 which was completed during the year: Direct materials $150,000 Direct labor hours (DLH): Dept. A 410 Dept. B 600 Machine hours (MH): Dept. A 500 Dept. B 1,725 The total cost of job A-402 is?Explanation / Answer
total cost of job a-402 for dept a : dlh= 410 labour cost=410 ($25) budgeted overhead =$510,900 machine hours =500 total cost= labour cost+ budgeted overhead dept b: dlh=600 labour cost =dlh*($22) =600($22) machine hours= 1725 budgeted overhead due to machines $434,720 total cost= labour cost+ budgeted machine overhead total cost of job= cost due to dept a and b