Question

Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 94,000 Total fixed manufacturing overhead cost $ 404,200 Variable manufacturing overhead per direct labor-hour $ 4.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 50 Total direct labor-hours 100 Direct materials $ 660 Direct labor cost $ 9,400 The total job cost for Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

The total job cost for Job P951, after calculating the plantwide predetermined overhead rate and adding the direct materials and direct labor costs, is $10,890.

Step-by-step explanation:

The student asks how to calculate the total job cost for Job P951 using a job-order costing system. The job was completed with a total of 100 direct labor-hours, and Dehner Corporation uses a plantwide predetermined overhead rate based on direct labor hours. We have the direct labor cost for the job, the direct materials cost, and we are given the variable manufacturing overhead per direct labor-hour as well as the total fixed manufacturing overhead cost for determining the plantwide predetermined overhead rate.

To calculate the predetermined overhead rate, we divide the total fixed manufacturing overhead cost by the total direct labor-hours. Then, we add the variable manufacturing overhead per direct labor-hour. This sum is multiplied by the total direct labor-hours for Job P951 to get the total overhead cost for the job. The total job cost is calculated by adding the direct materials, direct labor cost, and total overhead cost together.

First, we calculate the predetermined overhead rate:

Total Fixed Overhead / Total Direct Labor-Hours = $404,200 / 94,000 hours = $4.30 per labor-hour (fixed overhead rate)

Next, add the variable overhead rate to get the total overhead rate:

$4.30 (fixed) + $4.00 (variable) = $8.30 per labor-hour (total overhead rate)

Then, calculate the total overhead cost for Job P951:

$8.30 x 100 hours = $830 (total overhead cost)

Finally, we sum direct materials, direct labor, and total overhead cost for Job P951:

$660 (materials) + $9,400 (labor) + $830 (overhead) = $10,890 (total job cost)

Answer 2

Total cost= $10,890

Step-by-step explanation:

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= (404,200/94,000) + 4

Predetermined manufacturing overhead rate= $8.3 per direct labor hour

Now, we can allocate overhead:

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

Allocated MOH= 8.3*100= $830

Finally, the total cost of Job P951:

Total cost= 660 + 9,400 + 830

Total cost= $10,890