Question

Problem 2-18 Job-Order Costing for a Service Company (LO2-1, LO2-2, LO2-3) Check my work View previous Speedy Auto Repairs uses a job-order costing system. The company's direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics' hourly wages. Speedy's overhead costs include various items, such as the shop manager's salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room 26:20 The company applies all of its overhead costs to jobs based on direct labor-hours. At the beginning of the year, it made the following estimates: Direct labor-hours required to support estimated output Fixed overhead cost Variable overhead cost per direct labor-hour ces 43,000 $ 864,00 $ 1.00 Required: 1. Compute the predetermined overhead rate. 2. During the year, Mr. Wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. The following information was available with respect to his job: Direct materials Direct labor cost Direct labor-hours used $ 699 $ 236 Compute Mr. Wilkes' total job cost.

Answer 1

Answert Pageno Given that, Particulars Amount Diorect labor-hours ou fuired toqupport Estimated op 48000 + Fixed Overhead cost $ 864.000 Variable over head. Cast Per diouct labor hour $1.00 D paredetermined Overhead rate: Poredetermined Overhead Yate - expected overhead Cost - direct labor-hours - $ 864,000 + [48000x $1)] 48000 = [ $ 860,000 + $48000] .48000 912000 48000 = $19 Pore determined over head rate = $197.

Pageno a) Mr. Adi ke's total Job coşt:- Dissect materials = $699 Dived labor Cost = $236 Diorect labor hours used = 5x $19 -$95 Total Job cost = Direct Materials + Direct labor cost + Direct labor hours wed = $699 + $286 $95 = $1030 1 Total job cost - $10 30