James Industries Uses Departmental Overhead Rates to Allocate Its Manufacturing

Multiple Choice

James Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs.The company has two departments: Assembly and Sanding.The Assembly Department uses a departmental overhead rate of $35 per machine hour,while the Sanding Department uses a departmental overhead rate of $20 per direct labor hour.Job 603 used the following direct labor hours and machine hours in the two departments:

The cost for direct labor is $30 per direct labor hour and the cost of the direct materials used by Job 603 is $1,400.
How much manufacturing overhead would be allocated to Job 603 using the departmental overhead rates?

A) $450
B) $380
C) $715
D) $390