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    Bauer Manufacturing Company, Inc.

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    Bauer Manufacturing Company, Inc. 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 labor-hours in the Assembly Department. At the beginning of 2008, the following estimates were provided for the coming year:
    Machining Assembly
    Direct Labor Hours 30,000 60,000
    Machine Hours 80,000 20,000
    Direct Labor Cost $500,000 $900,000
    Manufacturing Ohd Costs $420,000 $240,000
    The accounting records of the company shows the following data for Job No. 316.
    Machining Assembly
    Direct Labor Hours 120 70
    Machine Hours 60 5
    Direct Labor Cost $100 $400
    Direct Materials Costs $300 $200
    For Bauer Manufacturing Company, Inc. what is the annual manufacturing overhead allocation rate for the Machining Department and Assembly Department, respectively?

    What amount of manufacturing overhead costs will be allocated to Job No. 316?
    a $439
    b $502
    c $595
    d $532

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    Solution Summary

    The solution computes the manufacturing overhead costs for Bauer Manufacturing Company, Inc.