Question

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the total cost of the job when it is completed in October?

A. $16,000
B. $22,500
C. $37,000
D. $26,500
E. $32,000

Answer 1

Total cost A38= $37,000

Step-by-step explanation:

Giving the following formula:

The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred.

Direct labor= 4,000 + 6,500= $10,500

Direct material= 2,500 + 3,000= $5,500

First, we need to apply overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 10,500*2= $21,000

Now, the total cost:

Total cost A38= 10,500 + 5,500 + 21,000

Total cost A38= $37,000