Question

Job HE-65 at Wilson Manufacturing Inc. required $300 of direct materials and 15 direct labor hours at $10 per hour. The company’s estimated total overhead cost for the year was $900,000 and estimated direct labor hours were 30,000.

Answer 1

Answer:

$900

Explanation:

costs for Job HE-65:

direct materials = $300

direct labor = 15 x $10 = $150

applied overhead = ??? = $30 per labor hour x 15 labor hours = $450

                                  ⇵

if we apply predetermined overhead rate based on direct labor hours, then we should apply $900,000 / 30,000 = $30 per labor hour.

the total costs for JOB HE-65 = $300 + $150 + $450 = $900

Answer 2

Answer:

Job HE-65  total cost 900 dollars

Explanation:

predeterminated overhead rate:

expected cost / expected driver

900,000 / 30,000 = $30

Each labor hour generates $30 dollars of overhead according to our expectation

Now we solve for the cost of job HE-65

materials 300

labor 15 hours x $10 = 150

and overhead 15 hours x $30 each = 450

total cost 300 + 150 + 450 0 900