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 $22.00 per hour. During the year, the company started and completed only two jobs—Job Alpha, which used 58,700 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 2 ? ? $ 2,590,000 ot ht ences Job Omega Direct materials Direct labor Manufacturing overhead applied Total job cost $ 448,700 574,200 391,500 $1,414,400 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.)

Answer 1

A)Plantwide Predetermined overhead Rate=Total Factory overhead cost/Direct Labour Hours

Direct Labour Hour for job Omega= Direct Labour Cost/Direct labour per hour rate

=574200/22

Direct labour hours=26100 hours

Job Omega predermined Overhead rate=Manufacturing overhead/Direct Labour Hours

=391500/26100

=$15

Job Alpha

Direct labour hour=58700(Given)

Direct labour cost=Direct labour hour*Direct labourRate per hour

=58700*22

=$1291400

Assuming Direct material as X and manufacturing overhead as 22X(as we are assuming manufacturing overhead depends upon direct Labour rate)

Total Cost=Direct Material+Direct Labour cost+Overhead cost

2590000=X+1291400+22X

1298600=23X

Direct material X=$56460.86

Overhead cost =22X

=22*56460.86

=$1242138.92

predermined Overhead rate=Manufacturing overhead/Direct Labour Hours

=1242138.92/58700

=$21.16