Question

plaza manufacturing company uses a job order costing system and uses direct manufacturing labor costs as an allocation base in the allocating of manufacturing overhead costs.for their operational year 2000E.C it has the following details budgeting actual 120k manufacturing overhead br100k direct material cost 200k direct labor cost 150k during tir of the same period job number 54 was completed containing th following information direct material 15000 direct labor 10000 required: 250k 200k 1. compute the budgeted and actual overhead rate 2. determine the total cost of job number. job number 54 under normal costing​

Answer 1

The budgeted overhead rate is 60% and the actual overhead rate is 67%. The total cost of job number 54 under normal costing is $41,700.

Step-by-step explanation:

To compute the budgeted overhead rate, you divide the budgeted manufacturing overhead cost by the budgeted allocation base. In this case, the budgeted manufacturing overhead cost is $120,000 and the budgeted allocation base is the total direct labor cost, which is $200,000. Therefore, the budgeted overhead rate is $120,000 / $200,000 = 0.6 or 60%.

Similarly, to compute the actual overhead rate, you divide the actual manufacturing overhead cost by the actual allocation base. The actual manufacturing overhead cost is $100,000 and the actual allocation base is the total direct labor cost, which is $150,000. Therefore, the actual overhead rate is $100,000 / $150,000 = 0.67 or 67%.

To determine the total cost of job number 54 under normal costing, you multiply the actual direct material cost, actual direct labor cost, and the actual overhead rate. The actual direct material cost is $25,000, the actual direct labor cost is $10,000, and the actual overhead rate is 67%. Therefore, the total cost of job number 54 is $25,000 + $10,000 + ($10,000 * 0.67) = $41,700.