Hahn Company uses a job-order costing system. Its plantwide predetermined overhe
ID: 2330545 • Letter: H
Question
Hahn Company uses a job-order costing system. Its plantwide predetermined overhead rate uses direct labor-hours as the allocation base. The company pays its direct laborers $22.00 per hour. During the year, the company started and completed only two jobs-Job Alpha, which used 58,700 direct labor-hours, and Job Omega. The job cost sheets for the these two jobs are shown below: Job Alpha Direct materials Direct labor Manufacturing overhead applied Total job cost 2,590,000 Job Omega Direct materials Direct labor Manufacturing overhead applied Total job cost $ 448,700 574,200 391,500 $1,414,400 Required: 1. Calculate the plantwide predetermined overhead rate. 2. Complete the job cost sheet for Job AlphaExplanation / Answer
total direct labour hrs= job omega; 574200/22= 26,100
(a) predetermined overhead rate = Estimated Overhead / Estimated Activity
$391,500/ 26,100
= 15 per direct labour Hour
(b) Apllying this overhead rate to total job cost= 15*58,700
=880,500
Manufacturing overhead Applied $ 880,500
Direct Labour $1,291,400
Direct material (2,590,000-880,500-1,291,400) $418,100
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