Question

26)

In December 2016, Shire Computer’s management establishes the 2017 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $780,000 of overhead costs and $520,000 of direct labor cost in year 2017. During March 2017, Shire began and completed Job 13-56.

  
1. What is the predetermined overhead rate for 2017?
2. Using the information on the following job cost sheet, determine the total cost of the job.

Complete this question by entering your answers in the tabs below.

Required 1 Required 2

What is the predetermined overhead rate for 2017?

Overhead Rate

Choose Numerator / Choose Denominator = Overhead Rate

Required 2

Using the information on the following job cost sheet, determine the total cost of the job. (Round your answers to the nearest dollar amount.)

Job Cost Sheet: Job No. 13-56

Direct Materials Direct Labor Overhead Total Cost

Date Requisition No. Amount Time- Ticket No. Amount Costs Applied

Mar.8 4-129 $7,000 T-306 $600

Mar.11 4-142 $6,950 T-432 $1,310

Mar.18 4-167 $3,450 T-456 $1,300

Answer 1

Answer:

Pre determined Overhead Rate
Choose Numerator	/	Choose Denominator	=	Overhead Rate
Overhead Cost	/	Direct Labor Cost	=	Overhead Rate
$780,000	/	$520,000	=	150%

Pre determined Overhead Rate is 150% of Direct Labor Cost

2.

Job 13-56 Cost Sheet
	Direct Material		Direct Labor		Overhead	Total Cost
Date	Requisition No.	Amount $	Time-Ticket No.	Amount $	Cost Applied $(150%of DL cost)
8-Mar	4-129	7,000	T-306	600	900 (600*150%)
11-Mar	4-142	6,950	T-432	1,310	1,965 (1,310*150%)
18-Mar	4-167	3,450	T-456	1,300	1,950 (1,300*150%)
		$17,400		3,210	4,815	$25,425