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 are the total manufacturing costs of Job #316?

Question

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 are the total manufacturing costs of Job #316?

Quizplus · Accepted Answer

To calculate the total manufacturing cost of Job #316, we need to allocate the manufacturing overhead costs based on the departmental cost driver rates. For machining department, the cost driver rate is $10 per machine-hour and for assembly department, it is $5 per direct labour-hour. The total machine-hours for Job #316 are 10 and the total direct labour-hours are 175. Therefore, the manufacturing overhead costs allocated to Job #316 are:
Machining department: 10 machine-hours x $10 per machine-hour = $100
Assembly department: 175 direct labour-hours x $5 per direct labour-hour = $875
Total manufacturing cost of Job #316 = Direct materials + Direct labour + Manufacturing overhead costs
= $350 + $320 + $100 + $875
= $1595

Answer: C 
 The best choice is C because it correctly calculates the total manufacturing cost of Job #316 by allocating manufacturing overhead costs based on the departmental cost driver rates. The other choices either do not allocate the manufacturing overhead costs or do not use the correct cost driver rates to allocate the manufacturing overhead costs.

Answer the Following Questions Using the Information Below: Botany Bay

Answer the Following Questions Using the Information Below:
Botany Bay