BCF Ltd. manufactures a product known as a Grunge. Direct material and labour costs for each Grunge are $300 and $150, respectively. To produce a Grunge requires 20 labour hours: 10 hours in machining, 7 hours in assembly, and 3 hours in finishing. Information for each department is as follows:
|
Machining |
Assembly |
Finishing |
|
|
Overhead costs Labour hours |
$120,000 20,000 |
$80,000 10,000 |
$30,000 10,000 |
What is the product cost of a Grunge using departmental overhead rates?
$455.75
$467.00
$450.00
$575.00