Question

Rowan Company produces pipes for​ concert-quality organs. Each job is unique. In April 2016​, it completed all outstanding​ orders, and​ then, in May 2016​, it worked on only two​ jobs, M1 and​ M2:

Direct manufacturing labor is paid at the rate of

$25 per hour. Manufacturing overhead costs are allocated at a budgeted rate of $22 per direct manufacturing​ labor-hour. Only Job M1 was completed in May.

Read the requirements

Requirement 1. Compute the total cost for Job M1.

Job Costs May 2016	Job M1
Total costs

Rowan Company, May 2016

Job M1

Job M2

Direct materials

$75,000

$56,000

Direct manufacturing labor

275,000

209,000

.

Answer 1

	Caluclation of Total cost of Jobs
		Job M1	Job M2
	Direct materials	75,000	56,000
	Direct manufacturing labor	275,000	209,000
	Total Overhead allocated	242,000	183,920	(See Note 1 below)
	Total Job Cost	592,000	448,920
	Note 1: OH Calculation
		Job M1	Job M2
	Direct manufacturing labor	275,000	209,000
	Labor rate per hour	25	25
	No. of Hours used in Job	11,000	8,360
	Budgdted Overehad rate per hr	22	22
	Total Overhead allocated	242,000	183,920