Answer the Following Questions Using the Information Below:
Botany Bay

question 197

Multiple Choice

Answer the following questions using the information below:
Botany Bay Boatbuilders uses departmental cost driver rates to allocate manufacturing overhead costs to products.Manufacturing overhead costs are allocated on the basis of machine-hours in the Machining Department and on the basis of direct labour-hours in the Assembly Department.At the beginning of 2010,the following estimates were provided for the coming year:
$$\begin{array}{l}\begin{array} { l l l } & \text { Machining } & \text { Assembly } \\\text { Direct labour-hours } & 30000&60000 \\\text { Machine-hours } & 80000&20000 & \\\text { Direct labour cost } & \$ 500000 & \$ 900000 \\\text { Manufacturing overhead costs } & \$ 420000 & \$ 240000\end{array}\\\\\text { The accounting records of the company show the following data for Job \#316: }\end{array}$$

$\begin{array}{lcc}& \text { Machining } & \text { Assembly } \\ \text { Direct labour-hours } & 120 & 70 \\\text { Machine-hours } & 60 & 5\\\text { Direct material cost } & \$ 300 & \$ 200 \\\text { Direct labour cost } & \$ 100 & \$ 400 \end{array}$
-What amount of manufacturing overhead costs will be allocated to Job #316?

• A)$532
• B)$502
• C)$595
• D)$439

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Definitions:

Process Cost Systems

A method in accounting used to track the costs associated with producing products in continuous processes.

Cost Data

Information related to the cost of goods or services, including production, labor, and materials costs.

Job Order

A custom or special order detailing the work to be performed or products to be produced.

Process Costing System

An accounting method used when identical or similar products are mass-produced, allocating costs based on process departments.