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Pani-rosa [81]
3 years ago
7

E&J Auto Body Shop estimated overhead cost for the coming year will be $15,000 and 5,000 direct labor hours will be worked.

The amount of overhead cost applied by E&J Auto Body Shop to one of its jobs, if the jobs required 10 direct labors hours to complete, would be :_______
a. $150
b. $ 30
c. $ 50
d. $ 15
Business
1 answer:
kondor19780726 [428]3 years ago
8 0

Answer:

correct option is b. $ 30

Explanation:

given data

overhead cost = $15,000

direct labor hours = 5,000

required direct labors hours = 10

solution

we get here Fixed Overhead Rate that is

Fixed Overhead Rate = estimated overhead cost ÷ direct labor hours ........1

Fixed Overhead Rate = \frac{15000}{5000}  

Fixed Overhead Rate = $3 per labor hour

and

Job overhead applied express as

overhead = Fixed Overhead Rate  × required direct labors hours  ..........2

overhead  = $3 × 10

overhead = $30

so correct option is b. $ 30

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