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Pinnacle Inc. manufactures curtains to client specifications. It has two cost categories that are directly traced...

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 $107,344
  • annual manufacturing plant cleaning costs of $122,381
  • annual manufacturing plant utilities of $120,476

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

  • $11,387 in materials
  • 33 hours of labor @ $12 per hour

The company also expects to use 23,136 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.

Solutions

Expert Solution

Total estimated overhead cost = 107344 + 122381 + 120476 350201
Predetermined overhead rate = Total estimated overhead cost / Estimated direct labor cost = 350201 / 250000 140.08%
Job #454
Materials cost 11387
Labor cost [ 33*12 ] 396
Overhead cost [ 396 * 140.08% ] 555
Total cost 12338

ekkarill92 answered 3 years ago
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