Answer:
Foto-FAst Copy Shop
1. Predetermined overhead rate = $4 per direct labor hour
2. Predetermined overhead rate = $11 per direct labor hour
3. Total job cost (Rick Anselm):
May 20 = $26.00
June 20 = $30.00
4. The two overhead rates:
a. $26.40 per machine hour
b. $3.71 per direct labor hour
Explanation:
a) Data and Calculations:
Average overhead per year prior to the purchase of the new equipment = $30,400
Average overhead per year after the installation of new equipment = $83,600
Budgeted direct labor hours for the year = 7,600
Wage rate = $9 per hour
1. Predetermined overhead rate prior to the purchase of the new equipment
= $4 ($30,400/7,600)
2. Predetermined overhead rate after the new equipment was purchased
= $11 ($83,600/7,600)
3. Cost of Rick Anselm's job on May 20:
Materials ($0.03 * 600) $18.00
Labor ($9 * 36/60) 5.40
Overhead applied 2.40 ($4 * 36/60)
Total cost of job = $25.80 = $26
Cost of Rick Anselm's job on June 20:
Materials ($0.03 * 600) $18.00
Labor ($9 * 36/60) 5.40
Overhead applied 6.60 ($11 * 36/60)
Total cost of job = $30.00
4. Overhead Rates Photocopying Computer Printing Total
Overhead cost $55,440 $28,160 $83,600
Machine hours 2,100
Direct labor hours 7,600
Overhead rates $26.40 $3.71
