Deloria Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department’s predetermined overhead rate is based on machine-hours and the Assembly Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
| Forming | Assembly |
|---|
| Machine-hours | 19,000 | 15,000 |
|---|
| Direct labor-hours | 4,000 | 8,000 |
|---|
| Total fixed manufacturing overhead cost | $ 129,200 | $ 77,600 |
|---|
| Variable manufacturing overhead per machine-hour | $ 1.60 | |
|---|
| Variable manufacturing overhead per direct labor-hour | | $ 3.00 |
|---|
During the current month the company started and finished Job T288. The following data were recorded for this job:
| Job T288: | Forming | Assembly |
|---|
| Machine-hours | 80 | 10 |
| Direct labor-hours | 30 | 40 |
| Direct materials | $ 730 | $ 380 |
| Direct labor cost | $ 900 | $ 1,200 |
The predetermined overhead rate for the Assembly Department is closest to:
▸ $3.00 per direct labor-hour
▸
$12.70 per direct labor-hour
▸ $9.70 per direct labor-hour
▸ $5.35 per direct labor-hour
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