4) Gill Manufacturing uses a predetermined overhead allocation rate based on a p

Question

4) Gill Manufacturing uses a predetermined overhead allocation rate based on a percentage of 4 direct labor cost. At the beginning of the year, Gill estimated total manufacturing overhead costs at $1,000,000 and total direct labor costs at 5840,000. In June, Gill completed Job 511. The details of Job 511 are shown below. (Round to 2 decimal places.) Direct materials cost Direct labor cost Direct labor hours Units of product produced 400 units $26,500 $10,000 500 hours How much was the total job cost of Job 511? (Round any percentages to two decimal places and your final answer to the nearest dollar.) A) $68,035 B) $36,976 C) $37,095 D) $48,400

Explanation / Answer

Predetermined overhead rate=(Estimated total manufacturing cost/Estimated total direct labor costs)

=(1,000,000/840,000)=1.19*Direct labor cost(Approx)

Hence overhead applied=(1.19*10000)=$11900

Hence total job cost=Direct material+Direct labor+Total Overhead

=(26500+10000+11900)

=$48400.

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