Question

Shire Computer's predetermined overhead rate is based on direct labor cost. Management estimates the company will incur $672,000 of overhead costs and $560,000 of direct labor cost for the year. During March, Shire began and completed Job 13-56. 1. What is the predetermined overhead rate for the year? 2. Use the information on the following job cost sheet to determine the total cost of the job. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the predetermined overhead rate for the year? Overhead Rate Choose Denominator: Choose Numerator: 1 - Overhead Rate Overhead rate Required 2 >

Answer 1

Predetermined overhead rate = Estimated overhead cost /Estimated direct labor cost

                           = 672000 / 560000

                           = 1.20 or 120% of direct labor cost

b)

JOB COST SHEET
Customer's Name :Keiser co					Job No: 13-56
Job description :5 Plasma monitors -61Inch
	Direct material		Direct labor		Overhead	Total cost
Date	Requisition No.	Amount	Time Ticket no.	Amount	cost applied
Mar 8	4-129	6000	T-306	670	670*120%=804	7474
Mar11	4-142	6500	T-432	1340	1340*120%= 1608	9448
Mar 18	4-167	3700	T-456	1300	1300*120%= 1560	6560
		16200		3310		23482