Question

Pinnacle Inc. manufactures curtains to client specifications. It has two cost categories that are directly traced to its products: materials and labor. It also has estimated overhead that consists of:

• annual manufacturing supervisor's salary of $126,445
• annual manufacturing plant cleaning costs of $193,323
• annual manufacturing plant utilities of $126,778

Pinnacle is trying to calculate the cost of making Job #454, which includes:

• $10,750 in materials
• 32 hours of labor @ $12 per hour

The company also expects to use 20,818 labor hours for the year. If Pinnacle allocates overhead based on $250,000 estimated direct labor dollars, what is the total cost ofJob #454? *Hint, make a job order cost sheet for Job 454. It should include materials, labor, and overhead. Round each step to the nearest 2 decimal places. For your final answer, round to the nearest dollar.

Answer 1

	annual manufacturing supervisor's salary		$126,445
	annual manufacturing plant cleaning costs		$193,323
	annual manufacturing plant utilities		$126,778
A	Total overhead		$446,546
B	Estimated direct labor dollars		$ 250,000.00
C=A/B	Overhead rate =		178.62%
	computation of job cost
	materials		$   10,750.00
	Direct labor		$        384.00
	Overhead =384*178.62%		$        685.89
	Total cost of job		$   11,819.89
	Answer =		$   11,820