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 $12.50 per hour. During the year, the company started and completed only two jobs-Job Alpha, which used 68,200 direct labor-hours, and Job Omega. The job cost sheets for the these two jobs are show below: Job Alpha Direct materials Direct labor Manufacturing overhead applied Total job cost $1,674,000 Job Omega Direct materials Direct labor $ 232,250 378,750 166,650 Manufacturing overhead applied $ 777,650 Total job cost Required: 1. Calculate the plantwide predetermined overhead rate. 2. Complete the job cost sheet for Job Alpha. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the plantwide predetermined overhead rate. (Round your answer to 2 decimal places.) Plantwide predetermined overhaad rate per DLH Required 2>

Answer 1

1.

Predetermined overhead rate is calculated on the basis of Direct labor hours.

Manufacturing overhead applied to Job omega = $166,650

Direct labor cost of Job omega = $378,750

Direct labor rate = $12.50 per hour

Direct labor hours used in Job omega = Direct labor cost of Job omega / Direct labor rate

= 378,750/12.50

= 30,300 hours

Predetermined overhead rate = Manufacturing overhead applied to Job omega / Direct labor hours used in Job omega

= 166,650/30,300

= $5.5 per direct labor hour

Predetermined Overhead Rate

$5.5

per DLH

2.

Direct labor cost of Job Alpha = Direct labor hours used x Direct labor rate

= 68,200 x 12.50

= $852,500

Manufacturing overhead applied to Job Alpha = Direct labor hours used x Predetermined Overhead Rate

= 68,200 x 5.5

= $375,100

Direct materials + Direct labor + Manufacturing overhead applied = Total job cost

Direct materials + 852,500+375,100 = 1,674,000

Direct materials = $446,400

Direct materials	446,400
Direct labor	852,500
Manufacturing overhead applied	375,100
Total Job Cost	$1,674,000

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