Question

Chief Corporation uses a job order costing system with a single plantwide predetermined overhead rate based on direct labor hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $1,550,000, variable manufacturing overhead of $6.00 per labor hour, and 50,000 labor hours. The following data are available for Job 915, which was recently completed: 665 $21,045 Total machine hours Direct materials cost Total direct labor hours Direct labor 615 $26 per hour rate What is the total job cost for Job 915? $59.790 $56,100 $45.690 0 $49.950 O None of the above

Answer 1

Predetermined overhead rate = Total fixed manufacturing overhead cost / Total labor hours = $1550000 /50000=$31

Total job cost for Job 915 = Direct material + Fixed manufactiring overhead applied on job + Variable manufacturing overhead + direct labour cost

= $21045 +( 615 direct labor hours X $31) +(615 direct labor X $6) + (615 direct labour hours X $26)

=$21045 +$ 19065 +$3690 +$15990

=$59,790

Option A is correct.