Answer:
a. Overhead Rate = 0.34
b. Direct Labour Cost = $53,820
Explanation:
a.
Overhead Rate based on direct materials is calculated as overhead cost/direct material cost
Overhead Cost = $612,000
Direct Materials Cost = $1,800,000
Overhead Rate = $612,000/$1,800,000
Overhead Rate = 0.34
b.
Given
Total cost of job in process = $90,000
Material Cost of job in process = $27,000
Overhead Applied = $9,180 (0.34% * $27,000)
Direct Labour Cost = Cost of job in process - Material Cost - Overhead Applied
Direct Labour Cost = $90,000 - $27,000 - $9,180
Direct Labour Cost = $53,820
