Lucas Industries Uses Departmental Overhead Rates to Allocate Its Manufacturing

question 55

Multiple Choice

Lucas Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $60 per machine hour, while the Sanding Department uses a departmental overhead rate of $30 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two departments: The cost for direct labor is $35 per direct labor hour and the cost of the direct materials used by Job 542 is $1500.
What was the total cost of Job 542 if Lucas Industries used the departmental overhead rates to allocate manufacturing overhead?

• A)$2060
• B)$2820
• C)$2745
• D)$2025

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Definitions:

Net Worth

The total value of an individual's or entity's assets minus liabilities; a measure of financial health.

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Financial obligations or debts owed by a company or an individual.

M1

A category of the money supply that includes all physical money, such as coins and currency, as well as demand deposits and other liquid assets held by the central bank.

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A commercial bank is a financial institution that offers a range of services including accepting deposits, providing loans, and offering investment products to individuals and businesses.