Figure 5-7 The following information is available pertaining to the Production Division of Clarkson Enterprises:
Refer to Figure 5-7. What are the total overhead costs assigned to Job 4X5, assuming the Assembly and Finishing Departments use direct labor hours and machine hours for their bases, respectively?
A) $62.50
B) $250.00
C) $750.00
D) $1,500.00

Question

Figure 5-7 The following information is available pertaining to the Production Division of Clarkson Enterprises:
 Refer to Figure 5-7. What are the total overhead costs assigned to Job 4X5, assuming the Assembly and Finishing Departments use direct labor hours and machine hours for their bases, respectively?
A) $62.50 
B) $250.00 
C) $750.00 
D) $1,500.00

Quizplus · Accepted Answer

To calculate the overhead costs assigned to Job 4X5, we need to calculate the predetermined overhead rate for each department based on their respective bases. For the Assembly Department, the predetermined overhead rate is $6 per direct labor hour ($72,000 ÷ 12,000 direct labor hours), and for the Finishing Department, it is $1.25 per machine hour ($150,000 ÷ 120,000 machine hours).

For Job 4X5, we have the following information: 
- Assembly Department: 10 direct labor hours 
- Finishing Department: 200 machine hours

Using the predetermined overhead rates, we can calculate the overhead costs assigned to Job 4X5 for each department: 
- Assembly Department: $6/direct labor hour x 10 direct labor hours = $60 
- Finishing Department: $1.25/machine hour x 200 machine hours = $250

Therefore, the total overhead costs assigned to Job 4X5 is $60 + $250 = $310, which corresponds to choice B.

Figure 5-7 the Following Information Is Available Pertaining to the Production