This question is incomplete. The complete question is given below:
Elliott Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company manufactures tools to customer specifications. The following data pertain to Job 1501:
Direct materials used.......................................................
$4,200
Direct labor-hours worked..............................................
300
Direct labor rate per hour................................................
$8.00
Machine-hours used........................................................
200
Predetermined overhead rate per machine-hour..............
$15.00
What is the total manufacturing cost recorded on Job 1501?
a.
$8,800
b.
$9,600
c.
$10,300
d.
$11,100
Answer:
The total manufacturing cost recorded on Job 1501 is $9,600 so option b is correct.
Step-by-step explanation:
Manufacturing cost:
Manufacturing cost is the complete expenditure incurred when manufacturing an end product. The calculation for total manufacturing costs includes the expenses for direct labor, raw materials and manufacturing overhead.
Formula:
Total manufacturing cost = direct materials used + direct labor + total overhead
We need to calculate the total overhead first.
Formula for total overhead:
Total overhead = predetermined overhead rate * machine hours
As predetermined overhead rate per machine-hour = $15.00
and Machine-hours used = 200
therefore by putting the values in the above formula, we get
Total overhead = 15 * 200
Total overhead = $3000
Formula for direct labor:
Direct labor = direct labor-hours worked * direct labor rate per hour
As Direct labor-hours worked = 300 and Direct labor rate per hour = $8.00 so
Direct labor = = 300 * 8
Direct labor = = $2400
Formula for Total manufacturing cost:
Total manufacturing cost = direct materials used + direct labor + total overhead
Therefore by putting the values in the above formula, we get
Total manufacturing cost = 4200 + 2400 + 3000
Total manufacturing cost = $9600
The total manufacturing cost recorded on Job 1501 is $9,600 so option b is correct.