Mag Mag applies manufacturing overhead to each job using departmental overhead r

Question

Mag Mag applies manufacturing overhead to each job using departmental overhead rates. The company's operations are divided into two departments: Katie and Huckleberry. The Katie department uses a departmental overhead rate of $52 per machine hour, while the Huckleberry department uses a departmental overhead rate of $28 per direct labor hour. Job JJ used the following machine hours in the two departments:

Katie

Huckleberry

Machine hours

44

55

Direct labor costs incurred for Job JJ in the Katie Department and the Huckleberry Department were $160 and $384, respectively. The wage rate in each department is

$20 per direct labor hour.

How much total manufacturing overhead would be applied to Job JJ using the departmental overhead rates?

Katie

Huckleberry

Machine hours

44

55

Explanation / Answer

Calculate total manufacturing overhead applied

Katie = 44*52 = 2288

Huckleberry = (384/20*28) = 537.60

Total manufacturing overhead applied = 537.60+2288 = $2825.60

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