Answer:
1) Job-order costing
2)$ 7.2 per direct labor hour
3)$ 7.941 per direct labor hour
4)Cost of installation= $ 4108.23
Explanation:
In job order costing the cost accounting procedures are designed to assign costs to each job. Then the costs assigned to each job are averaged over the units of production in the job to obtain an average cost per unit.
A process costing system accumulates all production costs for a large number of units of outputs and then these costs are averaged over all the units.
1) As each job is different, requiring different materials and labor for installing the systems Job-order costing will be used.
2) If normal costing is used then the Overhead cost are $50,328
Number of direct labor hours are 6,990
The overhead rate=Overhead costs/ Number of direct labor hours
The overhead rate=$50,328/6,990= $ 7.2 per direct labor hour
3) The average actual wage rate = Actual Overhead costs / Number of direct labor hours
The average actual wage rate = $48,043.05/ 6,050=$ 7.941 per direct labor hour
4) Direct materials=$3,540
Direct labor hours= 30
Actual Direct Labor rate = ($66,550/6,050 )= $ 11
Direct Labor = ($66,550/6,050 )*30 =11*30=$ 330
Overheads 30 *7.941= $ 238.23
Cost of installation= $3,540 +$ 330+$ 238.23= $ 4108.23
