Question

Assume a company had no jobs in progress at the beginning of July and no beginning inventories. It started and completed only two jobs during July—Job Y and Job Z. The company uses a plantwide predetermined overhead rate based on direct labor-hours. The following additional information from the month of July is available for the company as a whole and for Jobs Y and Z:

Estimated total fixed manufacturing overhead	$	13,000
Estimated variable manufacturing overhead per direct labor-hour	$	1.00
Estimated total direct labor hours to be worked		2,000
Total actual manufacturing overhead costs incurred	$	12,800

	Job Y			Job Z
Direct materials	$	13,000		$	7,700
Direct labor cost	$	21,000		$	7,500
Actual direct labor hours worked		1,400			470

What is the total job cost for Job Z?

Answer 1

Job Z $7,700 $7,500 Total Job Cost Direct material Direct labor Manufacturing overhead Variable overheads Fixed overheads applied Total Job Cost $470 470*$1 $3,055 470*$6.5 $18,725 Answer Predetermined overhead rate Estimated Fixed manufacturing overheads Estimated direct labor hours $13,000 2,000 $6.50 Per direct labor hour