Question

As of the end of June, the job cost sheets at Racing Wheels, Inc., show the following total costs accumulated on three custom jobs.

Job 102 Job 103 Job 104
Direct materials $15,000 $33,000   $27,000  
Direct labor 8,000 14,200   21,000
Overhead applied 4,000 7,100   10,500


Using the accumulated costs of the jobs, what predetermined overhead rate is used?

Answer 1

Job 102 = 29.69% of the Manufacturing Cost.

Job 103 Predetermined overhead rate =26.15%of the Manufacturing Cost.

Job 104 Predetermined overhead rate= 35.89%of the Manufacturing Cost.

Job 102 = 50% of direct labor Cost

Job 103 Predetermined overhead rate 50%of direct labor Cost

Job 104 Predetermined overhead rate= 50%of direct labor Cost

Step-by-step explanation:

Total Manufacturing Costs

Job 102 Job 103 Job 104

Direct materials $15,000 $33,000 $27,000

Direct labor 8,000 14,200 21,000

Overhead applied 4,000 7,100 10,500

Total $27000 54,300 58500

Predetermined overhead rate = Overhead applied/ Direct Labor Cost *100

Job 102 = 8000/4000 *100= 50% of direct labor Cost

Job 103 Predetermined overhead rate=14200/ 7100 (100) = 50%of direct labor Cost

Job 104 Predetermined overhead rate=21000/ 10500 (100) = 50%of direct labor Cost

Using the accumulated costs

Predetermined overhead rate = Overhead applied/ Accumulated Costs (100

Job 102 =8000/27000*100= 29.69% of the Manufacturing Cost.

Job 103 Predetermined overhead rate=14200/ 54300 (100) = 26.15%of the Manufacturing Cost.

Job 104 Predetermined overhead rate=21000/ 58500 (100) = 35.89%of the Manufacturing Cost.