Question

Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per direct labor-hour 72,000 $223,200 $ 3.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job Total direct labor-hours Direct materials Direct labor cost 20 100 $ 890 $7,200 The total job cost for Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $1,500 o o o of $8,090 O $8,700 $7.810

Answer 1

Predetermined overhead rate = Variable overhead cost per direct labor-hour + Fixed manufacturing overhead cost/Estimated direct labor hours

= 3 + 223,200/72,000

= 3 + 3.1

= $6.1 per direct labor hour

Overhead applied = Actual direct labor hours used x  Predetermined overhead rate

= 100 x 6.1

= $610

Job cost sheet

Direct material	890
Direct labor	7,200
Overhead applied	610
Total cost	$8,700

Total cost = $8,700

Third option is correct

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