The following information is available on departmental overhead recovery rates for Major Manufacturing:
Machining Department $47.50 per machine hour
Assembling Department $16.90 per direct labour hour
How much overhead will be applied to job X123 if it uses 13 machine hours and 20 direct labour hours

Question

The following information is available on departmental overhead recovery rates for Major Manufacturing: 
Machining Department $47.50 per machine hour
Assembling Department $16.90 per direct labour hour
How much overhead will be applied to job X123 if it uses 13 machine hours and 20 direct labour hours

Quizplus · Accepted Answer

Overhead applied in Machining Department = 13 machine hours * $47.50 per machine hour = $617.50
Overhead applied in Assembling Department = 20 direct labour hours * $16.90 per direct labour hour = $338
Total overhead applied to job X123 = $617.50 + $338 = $955.50. Therefore, option D is correct.

The Following Information Is Available on Departmental Overhead Recovery Rates