13. Hogan’s Ltd uses a job order cost system and allocates manufacturing overhead to orders on...

13. Hogan’s Ltd uses a job order cost system and allocates manufacturing overhead to orders on the basis of direct labour cost. The predetermined overhead rates for the year are 200% for Department A and 50% for Department B. Job# 23, started and completed during the year, had the following costs (note: some of the data below is incomplete)

: Department A B

Direct materials $25,000 $5,000

Direct labour ? 30,000

Manufacturing Overhead 40,000 ?

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Expert Solution

All working forms part of the answer
Working for Department A

Department A
Manufacturing Overhead	$ 40,000.00
Predetermined Overhead rate	200% of Direct Labor Cost
Direct Labor Cost	$ 20,000.00 [$40,000 / 200%]

Working for Department B

Department B
Direct Labor Cost	$ 30,000.00
Predetermined Overhead rate	50% of direct labor cost
Manufacturing overhead	$ 15,000.00 [$30,000 x 50%]

Answer, including missing figures:

	Department A	Department B
Direct material	$ 25,000.00	$ 5,000.00
Direct Labor	$ 20,000.00	$ 30,000.00
Manufacturing Overhead	$ 40,000.00	$ 15,000.00
Total	$ 85,000.00	$ 50,000.00

ekkarill92 answered 1 year ago

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