Question

Tektron Industries applies overhead on the basis of 200% of direct labor cost. Job No. 275 is charged with $30,000 of direct materials costs and $40,000 of manufacturing overhead. What are the total manufacturing costs for Job No. 275

Answer 1

Total cost= $150,000

Step-by-step explanation:

Giving the following information:

Tektron Industries applies overhead on the basis of 200% of direct labor cost. Job No. 275 is charged with $30,000 of direct materials costs and $40,000 of manufacturing overhead.

First, we need to calculate the allocated overhead:

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

Allocated MOH= 2*40,000= $80,000

Now, we can calculate the total job cost:

Total cost= direct material + direct labor ´allocated overhead

Total cost= 30,000 + 40,000 + 80,000= $150,000