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 $18.00 per hour. During the year, the company started and completed only two jobs—Job Alpha, which used 65,400 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 ? ? $ 2,302,000 Job Omega Direct materials Direct labor Manufacturing overhead applied Total job cost $ 410,600 561,600 343,200 $1,315,400 Required: 1. Calculate the plantwide predetermined overhead rate. 2. Complete the job cost sheet for Job Alpha.

Answer 1

Direct labor hours taken for job Omega = 561,600/18

= 31,200 dlh

Predetermined overhead rate = Applied manufacturing overhead/Direct labor hours

= 343,200/31,200 hours

= $11 per direct labor hour

Job cost sheet for job Alpha
Direct materials (balancing figure)	405,400
Direct labor (65,400*18)	1,177,200
Manufacturing overhead applied (65,400*11)	719,400
Total job cost	2,302,000