Question

Machining: 4 hours (all automated)
Sanding: 1 hour (all direct labor)
Painting: 2 hours (including dry time of 1.5 hours)

The company uses departmental overhead rates. Overhead is allocated at the rate of $6/direct labor hour in Sanding, and $15/machine hour in Machining. Painting overhead is allocated on the basis of total time in the department and is allocated at a rate of $3/hour.

How much overhead is allocated to the job?

a. $78
b. $67.50
c. $45
d. $72

Answer 1

Answer:

Allocated overhead= $45

Explanation:

Allocated overhead = Overhead absorption rate × hours required

Machining = 4 hours × $6= $24

Sanding = 1 × $15 = $15

Painting = 2 × $3 = $6

Overhead allocated -= $24 + $15 +$6 = $45

Allocated overhead= $45