Question

Hahn Company uses a job-order costing system. Its plantwide predetermined overhead rate uses direct labor-hours as the allocation base. The company pays its direct laborers $14.50 per hour. During the year, the company started and completed only two jobs-Job Alpha, which used 69.700 direct labor-hours, and Job Omega. The job cost sheets for the these two jobs are shown below: Job Alpha Direct materials Direct labor Manufacturing overhead applied Total job cost $1,636,000 Job Omega Direct materials Direct labor Manufacturing overhead applied Total job cost $281,450 421,950 218,250 $921,650

1. calculate plantwide predetermined overhead rate.

2. complete the job cost sheet for job alpha:

Direct materials
Direct labor
manufacturing overhead applied
total job cost

Answer 1

Solution 1:

Nos of direct labor hours in job omega = $421,950 / $14.50 = 29100 hours

Plantwide predetermined overhead rate. = Overhead applied to Job omega / Nos of DLHs

= $218,250 / 29100 = $7.50 per DLH

solution 2:

Cost Sheet - Job Alpha
Particulars	Amount
Direct materials	$102,600.00
Direct labor	$1,010,650.00
Manufacturing overhead applied	$522,750.00
Total	$1,636,000.00