Question

Phyllo Computer Company uses a job order costing system in which each batch manufactured is a different job. Phyllo Computer Company assigns direct materials and direct labor to each job. The company assigns labor costs at $23 per hour. It allocates manufacturing overhead to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. At the beginning of 2020, the controller prepared the following budget: (Click the icon to view the budget.) In November 2020, Phyllo Computer Company worked on several jobs. Records for two jobs appear here: E: (Click the icon to view the records for the two jobs.) Read the requirements. x 1 Data Table rmined Data Table Job 721 Job 722 Manufacturing overhead $ $ 210,000 1,050,000 Direct labor hours 770 hours 100 hours Direct labor costs Direct materials $ 2,200 Print Done Print Done Total cost

Answer 1

Solution 1:

Manufacturing costs	/	Direct labor costs	=	Predetermined OH Allocation rate
210000		1050000		20%

Solution 2:

	Job 721	Job 722
Direct Materials	22300	2200
Direct labor costs ($23*Direct labor hours)	17710	2300
Applied Overhead (Direct labor cost*20%)	3542	460
Total cost	43552	4960

Solution 3:

Phyllo Computer Company assigns costs to jobs to help the company "Identify the jobs" that cover all costs and contribute to profit. Assigning costs to "individual jobs" also can help Phyllo "to know the profitability of each job".