Snappy Company has a job-order costing system and uses a predetermined overhead

Question

Snappy Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Manufacturing overhead cost and direct labor hours were estimated at $77,000 and 35,000 hours, respectively, for the year. In July, Job #334 was completed at a cost of $4,500 in direct materials and $3,000 in direct labor. The labor rate is $6 per hour. By the end of the year, Snappy had worked a total of 40,500 direct labor-hours and had incurred $88,200 actual manufacturing overhead cost.

QUESTION @:Snappy's manufacturing overhead for the year was: (Round intermediate calculations to 2 decimal places.)

Snappy Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Manufacturing overhead cost and direct labor hours were estimated at $77,000 and 35,000 hours, respectively, for the year. In July, Job #334 was completed at a cost of $4,500 in direct materials and $3,000 in direct labor. The labor rate is $6 per hour. By the end of the year, Snappy had worked a total of 40,500 direct labor-hours and had incurred $88,200 actual manufacturing overhead cost.

Explanation / Answer

Answer

material = 77000 / 35000

= 2.2

overhead cost = 3000 / 6 * 2.2

= 1100

total cost = 4500 + 3000 + 1100

= 8600

per unit cost = 8600 / 200

= 43 per unit

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