Question

Biotechnologies Unlimited, Inc. (BUD). located in Sydney. Nova Scotia, is a small but growing biotech quality analysis organization that tests pesticides before they are used by farmers. The testing procedures are specific to the individual pesticides used because reagents used for testing react differently based on their composition and the quantity used. How they are introduced into the pesticides for testing is also important. During the month of December 2014, it completed one job (reference number: KS 2014-337), records pertaining to this job are as follows: Amount $ 750 440 Date 2/12/14 4/12/14 11/12/14 13/12/14 20/12/14 22/12/14 Document M-3316 L-4423 L-4437 M-3399 M-3407 L-4509 250 1.000 320 750 The documents with the references M and L pertain to direct materials and direct labour, respectively. BUL currently allocates overhead using direct labour cost as the allocation base. For the year 2014, it estimated $548,730 as the overhead amount and $469,000 for direct labour costs. Required: 1. Compute the overhead allocation rate for 2014 Predetermined overhead rate 2. Compute the total costs of the job. (Round "Overhead" answer to 2 decimal places.)

Answer 1

Predetermined Overhead rate Estimated overhead Estimated direct labour cost 548730 469000 Predetermined Overhead rate 117% of direct labor Cost Compute the total cost of th Job 34 Direct Material (750+1000+320) Direct Labour(440+250+750) Overhead(1440*117%) 2070 1440 1684.80 38 3. Prepare a job cost sheet for job Ks 2014-337 Number Department Description 1-Dec-14 23-May-14 KS2014-337 Commerical Pesticide testing Direct Materials Reg. No. Amount 3316 3399 3407 JOB COST SHEET Date initiated Date completed Units completed Direct Labour Time-Sheet Hours 750 4423 1000 4437 320 4509 Overhead Amount DL Cost Overhead Rate Amount 440 1440 117% 1684.80 250 750 1440 2070

Cost Summary Job Completion Status Progress to date Date Direct Material Direct Labour Overhead Total Cost Unit Cost 2070 1440 1684.80 5194.80