A company assigns overhead cost to completed jobs on the basis of 111% of direct

Question

A company assigns overhead cost to completed jobs on the basis of 111% of direct labor cost.The job cost sheet for Job 313 shows $15,434 in direct materials has been used on the job and that $10,600 in direct labor cost has been incurred. A total of 1,350 units were produced in Job 313.

A company assigns overhead cost to completed jobs on the basis of 111% of direct labor cost.The job cost sheet for Job 313 shows $15,434 in direct materials has been used on the job and that $10,600 in direct labor cost has been incurred. A total of 1,350 units were produced in Job 313.

Explanation / Answer

Total overhead =(111%*$10600)=$11766

a.Total manufacturing cost=Direct materials+Direct labor+Total overhead

=(15434+10600+11766)

=$37800

b.Unit product cost=(37800/1350)

=$28

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