Question

Estimated cost and operating data for three companies for the upcoming year follow:

Answer 1

Overhead will be undercharged by $ 7,400 (Actual Overheads - Overheads charged)

Labour Hr Predetermined Overhead rate Overhead charged

Job 418 12,000.00 6.7 80400

Job 419 36,000.00 6.7 241200

Job 420 30,000.00 6.7 201000

 522,600.00

What is Estimated cost?

• The cost that will be incurred to create a product or construct something is projected as an estimated cost.
• This sum is determined either as part of a sales bid when seeking to sell to a client or as part of the capital budgeting process for an internal project.
• In accordance with the provisions of a fixed price contract, the party providing the anticipated cost may be required to pay the sum projected.
• An estimated cost is a rough calculation of future costs associated with producing products or finishing a project.
• Costs like labour, materials, and capital are included, both fixed and variable.

• The total anticipated future costs incurred by a project or company are known as the estimated cost.
• It is the statistical total of all costs, both fixed and variable, including the capital, labour, and materials used in a project or the production of commodities.
• Though it appears similar.
• It is quite distinct from the average price.
• It is not an estimate; rather, it is determined scientifically.

overhead $\frac{cost}{DM cost}$= $\frac{798000}{399000}$

= 2.0 or 200%

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