Question

Exercise 2-7 Job-Order Costing; Working Backwards [LO2-1, LO2-2, LO2-3] 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 $15.50 per hour. During the year, the company started and completed only two jobs-Job Alpha, which used 64,400 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 $ 1,790,000 Job Omega Direct materials Direct labor Manufacturing overhead applied $ 276,950 401,450 220,150 $ 898,550 Total job cost 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.) Plantwide predetermined overhead rate per DLH

Answer 1

1	Computation of plant wide Predetermined overhead rate:
	Predetermined overhead rate:	=	Manufacturing overheads /Direct labor hours
		=	$220150 / 25900 Direct labor hours
		=	$                  8.50	per DLH
	Direct labor hours	=	Total Direct labor cost / Direct labor rate per hour
		=	$401450 / $15.50
		=	25,900
2	Job cost sheet for Alpha:
	Direct material (balancing figure)	=	$          2,44,400
	Direct labor (64400 DLH X $15.50)	=	$          9,98,200
	Manufacturing overhead applied (64400 DLH X $8.50)	=	$          5,47,400
	Total job cost	=	$       17,90,000