Furniture Company manufactures tables. It has two manufacturing departments: Department A and B. The company uses a budgeted overhead rate for applying overhead to production. In March, the two production departments had budgeted allocation bases of 4,000 machine-hours in Department A and 8,000 direct manufacturing labor-hours in Department B. The budgeted manufacturing overheads for the month were $57,500 and $62,500, respectively. For Job A, the actual costs incurred in the two departments were as follows: Department A Department B Direct materials purchased $4,000 $1,750 Direct materials used 3,250 1,350 Direct manufacturing labor 5,250 5,350 Direct labor hours 100 300 Machine hours 800 200 What is the total cost of Job A?

The total cost of Job A is $29,044

Explanation:

The computation of the total cost is shown below:

= Direct materials used for Department A + Direct materials used for Department B + Direct manufacturing labor for Department A + Direct manufacturing labor for Department B + Applied overhead for Department A + Applied overhead for Department B

where,

Applied overhead for Department A = (Budgeted manufacturing overheads : machine-hours) * Department A machine hours

= ($57,500 : 4,000 machine-hours) * 800 machine-hours

= $11,500

Applied overhead for Department B = (Budgeted manufacturing overheads : Direct labor hours) * Department B Direct labor hours

= ($62,500 : 8,000 Direct labor hours) * 300 Direct labor hours

= $2,344

The other items values would remain the same

Now put these values to the above formula

So, the value would equal to

= $3,250 + $1,350 + $5,250 + $5,350 + $11,500 + $2,344

= $29,044