Answer:
The question is not complete, find below complete question:
Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead for the years was $760,000 and estimated direct labor hours were 20,000. What would be recorded as the cost of job WR53?
A. $200
B. $350
C. $380
D. $730
The correct option is D, $730 as shown below
Explanation:
Overhead absorption rate is given total overhead /direct labor hours
Overhead absorption rate=$760000/20000
=$38/ labor hour
Hence job WR53 would require $380($38*10 hrs) in overhead cost
The total cost of the job is given as follows:
Direct materials $200
Direct labor cost($15*10) $150
Overhead on the job <u> $380</u>
Total cost <u>$730</u>
The job WR53 would cost $730
In essence, for the job to be profitable, it must be sold at a price beyond $730, otherwise the job might be sold at a loss
