Question

5) Grib Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. The predetermined overhead rates for the year are 200% of direct labor cost for Department A and 50% of direct labor cost for Department B. Job 436, started and completed during the year, was charged with the following costs: Department A Department B $50,000 $10,000 Direct materials ? $60,000 Direct labor $80,000 ? Manufacturing overhea The total manufacturing cost assigned to Job 436 was: 1. A) $360,000 B) $390,000 C) $270,000 D) $480,000

Please help me complete this!

I have been struggling for a while, and mainly I need the answer!

Thank you for your help!

Answer 1

5)

manufacturing overhead is allocated as a % of labor cost

Manufacturing cost = Labor+material+manufacturing Overhead

	A	B	Total
Material	$50,000	$10,000	$60,000
Labor*	$40,000	$60,000	$100,000
Overhead**	$80,000	$30,000	$110,000
			$270,000

*Department A

Manufacturing overhead is 200%* labor cost

$80,000 =Labor cost*200%

Labor cost = 80,000/200%

=$40,000

** Department B

Manufacturing Overhead is 50% of labor cost

=$60,000*50%

=$30,000

Thus, Total allocated cost is $270,000

Answer C)

Sorry only one answer per post

Please upvote if you find this helpful.Incaseof query please comment.