Question

Waleska Manufacturing uses a job order cost system. It applies overhead to jobs at a rate of 150% of direct labor costs. Job No. 200 required $400 in direct labor costs. The job was initially budgeted to require $4250 in direct labor costs. Overhead applied to Job No. 200 during the period amounted to:

A. $425.
B. $600.
C. $650.
D. Some other amount.

Answer 1

The overhead applied to Job No. 200 by Waleska Manufacturing, which uses a rate of 150% of direct labor costs, is $600. This is calculated by multiplying the direct labor costs of $400 by the overhead rate of 150% (or 1.5).

Step-by-step explanation:

The question pertains to Waleska Manufacturing, which employs a job order cost system and applies overhead based on direct labor costs. To calculate the amount of overhead applied to Job No. 200, we use the provided overhead rate of 150% and the actual direct labor costs of $400. The formula to determine the overhead applied is:

Overhead Applied = Overhead Rate x Direct Labor Costs

Therefore:

Overhead Applied = 150% x $400

Overhead Applied = 1.5 x $400

Overhead Applied = $600

Thus, the overhead applied to Job No. 200 amounts to $600.