Griffin Manufacturing uses job order costing to measure and track the costs incu
ID: 2388842 • Letter: G
Question
Griffin Manufacturing uses job order costing to measure and track the costs incurred for specific jobs. While most of the jobs do require some machine time, Griffin has determined that direct labor cost drives its manufacturing overhead costs. During the month of August, the following data were available for Job #45:Direct labor
200 hours at $15 per hour
Direct materials
90 gallons at $6 per gallon
Machine hours used
100 hours
If total overhead costs during the month totaled $4,000 when a total of $20,000 in direct labor costs were incurred, what will be the total manufacturing cost of Job #45?
Answer
a. $3,580
b. $3,540
c. $7,540
d. $4,140
Explanation / Answer
Overhead will be allocated at 4,000/20,000= $.20 per direct labor dollar. So direct labor dollars of 200*15= 3,000 will pick up 3,000*.20 = $600 worth of overhead. Thus total manufacturing costs will be 200*15 +90*6 +600= $4,140
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