Question

Session Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 70,000 Total fixed manufacturing overhead cost $511,000 Variable manufacturing overhead per direct labor-hour $ 2.10 Recently, Job K913 was completed with the following characteristics: Total direct labor-hours 150 Direct materials $ 705 Direct labor cost $4,650 The total job cost for Job K913 is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice

Answer 1

Total cost= $6,765

Step-by-step explanation:

Giving the following information:

Total direct labor-hours 70,000

Total fixed manufacturing overhead cost $511,000

Variable manufacturing overhead per direct labor-hour $ 2.10

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= (511,000/70,000) + 2.1

Predetermined manufacturing overhead rate= $9.4 per direct labor hour

Job K913:

Total direct labor-hours 150

Direct materials $ 705

Direct labor cost $4,650

Total cost= 705 + 4,650 + (150*9.4)

Total cost= $6,765