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 $12.00 per hour. During the year, the company started and completed only two jobs—Job Alpha, which used 65,100 direct labor-hours, and Job Omega. The job cost sheets for the these two jobs are shown below: ? Job Alpha Direct materials Direct labor Manufacturing overhead applied Total job cost ? $ 1,632,000 Job Omega Direct materials Direct labor Manufacturing overhead applied Total job cost $ 195,400 326,400 136,000 $ 657,800 Required: 1. Calculate the plantwide predetermined overhead rate, 2. Complete the job cost sheet for Job Alpha.

Answer 1

1) Plantwide overhead rate:

Direct labor hour = 326400/12 = 27200

Overhead rate = Manufacturing overhead/Direct labor hour = 136000/27200 = 5 per labor hour

2) Job Alpha

Direct material	525300
Direct labor (65100*12)	781200
Manufacturing overhead applied (65100*5)	325500
Total Job Cost	1632000