Question

In December 2014, Shire Computer's management establishes the 2015 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $747,500 of overhead costs and $575,000 of direct labor cost in year 2015. During March 2015, Shire began and completed Job No. 13-56. 1. What is the predetermined overhead rate for year 2015? Overhead Rate 1 Choose Denominator: Choose Numerator: II Overhead Rate Overhead rate / 11 1 II 2. Compute the job cost sheet. JOB COST SHEET: Job 13-56 Direct Materials Direct Labor Requisition No. Amount Time-Ticket No. Amount Total Cost Overhead Costs Applied Date Mar. 8 4-129 $ $ 700 Mar. 11 4-142 5,000T-306 7,020 7-432 3,330 T-456 1,250 1,250 Mar. 18 4-167

Answer 1

1.

Overhead Rate
Choose Numerator	/	Choose Denominator	=	Overhead rate
Estimated overheads	/	Estimated direct labor hours	=	Overhead rate
747,500	/	575,000	=	130% of direct labor cost

2.

	JOB COST SHEET : Job 13-56
	Direct Materials		Direct Labor		Overhead	Total Cost
Date	Requisition No.	Amount	Time-Ticket No.	Amount	Costs Applied
Mar. 8	4-129	5,000	T-306	700	700 x 130% = 910	6,610
Mar. 11	4-142	7,020	T-432	1,250	1,250 x 130% = 1,625	9,895
Mar. 18	4-167	3,330	T-456	1,250	1,250 x 130% = 1,625	6,205
		$15,350		$3,200	$4,160	$22,710

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