Question

The Maverick company 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.

Estimated total direct labor hours :        $2,800

Estimated total fixed MOH cost :         $35,000

Estimated variable MOH per direct labor hour : $2.34

Recently, Job D3 was completed with the following characteristics :

# of units in the job :       14

total direct labor hours:   200

direct material cost : $16,500

direct labor cost : $36,000

using the above info, calculate the following ( do not round answers)

1- estimated total MOH ?

2- predetermined overhead rate ?

3- applied manufacturing overhead for job D3

4- total job D3 cost ?

5- job D3 product cost ?

Answer 1

Answer 1.

Estimated direct labor hours = 2,800
Estimated Fixed MOH cost = $35,000
Estimated Variable MOH per direct labor hour = $2.34

Estimated Total MOH = Estimated direct labor hours* Estimated Variable MOH per direct labor hour + Estimated Fixed MOH cost
Estimated Total MOH = $35,000 + $2.34 * 2,800
Estimated Total MOH = $41,552

Answer 2.

Estimated Total MOH = $41,552
Estimated direct labor hours = 2,800

Predetermined Overhead Rate = Estimated Total MOH / Estimated direct labor hours
Predetermined Overhead Rate = $41,552 / 2,800
Predetermined Overhead Rate = $14.84 per direct labor hour

Answer 3.

Job D3:

Predetermined Overhead Rate = $14.84 per direct labor hour
Number of direct labor hours = 200

Applied Manufacturing Overhead = Predetermined Overhead Rate * Number of direct labor hours
Applied Manufacturing Overhead = $14.84 * 200
Applied Manufacturing Overhead = $2,968

Answer 4.

Job D3:

Applied Manufacturing Overhead = $2,968
Direct Material Cost = $16,500
Direct Labor Cost = $36,000

Total Cost = Direct Material Cost + Direct Labor Cost + Applied Manufacturing Overhead
Total Cost = $16,500 + $36,000 + $2,968
Total Cost = $55,468

Answer 5.

Total Cost = $55,468
Number of units = 14

Product Cost = Total Cost / Number of units
Product Cost = $55,468 / 14
Product Cost = $3,962