Yancey Productions is a film studio that uses a job-order costing system. The co

Question

Yancey Productions is a film studio that uses a job-order costing system. The company’s direct materials consist of items such as costumes and props. Its direct labor includes each film’s actors, directors, and extras. The company’s overhead costs include items such as utilities, depreciation of equipment, senior management salaries, and wages of maintenance workers. Yancey applies its overhead cost to films based on direct labor-dollars.

At the beginning of the year, Yancey made the following estimates:

Required:

1. Compute the predetermined overhead rate.

2. During the year, Yancey produced a film titled You Can Say That Again that incurred the following costs:

QUESTION:

1.Compute the predetermined overhead rate. (Round your answer to 2 decimal places.)

2.Compute the total job cost for this particular film. (Round your intermediate calculations to 2 decimal places.)

Direct labor-dollars to support all productions $ 8,390,000 Fixed overhead cost $ 5,034,000 Variable overhead cost per direct labor-dollar $ 0.19

Explanation / Answer

1. Compute the predetermined overhead rate predetermined overhead rate = Total fixed Overhead / Total Direct Labour Dollars = $5,034,000/8,390,000 $                   0.60 per dollar of labour cost 2.the total job cost for this particular film. Direct materials $ 1,446,000.00 Direct labor $ 2,517,000.00 Overhead applied [$2517000*$0.60] $ 1,510,200.00 Total job cost $ 5,473,200.00

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