Bond Industries Uses Departmental Overhead Rates to Allocate Its Manufacturing

question 8

Multiple Choice

Bond 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 $20 per machine hour,while the Sanding Department uses a departmental overhead rate of $15 per direct labor hour.Job 542 used the following direct labor hours and machine hours in the two departments: $$\begin{array} { | l | c | c | } \hline \text { Actual results } & \begin{array} { c } \text { Assembly } \\\text { Department }\end{array} & \begin{array} { c } \text { Sanding } \\\text { Department }\end{array} \\\hline \text { Direct labor hours used } & 4 & 3 \\\hline \text { Machine hours used } & 9 & 5 \\\hline\end{array}$$ The cost for direct labor is $25 per direct labor hour and the cost of the direct materials used by Job 542 is $1,200.
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What was the total cost of Job 542 if Bond Industries used the departmental overhead rates to allocate manufacturing overhead?

• A)$1,375
• B)$1,425
• C)$1,500
• D)$1,600

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