Question

Doakes Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company calculated its predetermined overhead rate for the current period as $8.50 per direct labor hour. Recently, Job M843 was completed with the following characteristics: Number of units in the job 60 Total direct labor-hours 120 Direct materials $ 630 Direct labor cost $ 2,400 The total product cost for Job M843 is closest to:

Answer 1

Answer:

Total cost= $4,050

Explanation:

Giving the following information:

Predetermined overhead rate= $8.50 per direct labor hour.

Job M843:

Total direct labor-hours 120

Direct materials $ 630

Direct labor cost $ 2,400

First, we need to allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 8.5*120= $1,020

Now, the total cost:

Total cost= 630 + 2,400 + 1,020

Total cost= $4,050