Homework Sourseplease let me know how to solve them 1 Davvies Company uses
please let me know how to solve them.
1. Davvies Company uses a job-order costing system. Assume that Job #504 is the only one in process. The following information is available:
Refer to Davvies Company. What is the overhead application rate if Davvies uses a predetermined overhead application rate based on direct labor hours (rounded to the nearest whole cent)? Answer: 5.38
Budgeted direct labor hours
65,000
Budgeted machine hours
9,000
Budgeted overhead
$350,000
Direct material
$110,500
Direct labor cost
$70,000
2. Refer to Davvies Company. What is the total cost of Job #504 assuming that overhead is applied at the rate of 135% of direct labor cost (rounded to the nearest whole dollar)?
Answer: $275,000
| 1. Davvies Company uses a job-order costing system. Assume that Job #504 is the only one in process. The following information is available: Refer to Davvies Company. What is the overhead application rate if Davvies uses a predetermined overhead application rate based on direct labor hours (rounded to the nearest whole cent)? Answer: 5.38
|
Solution
1. Overhead application rate = Budgeted overhead/Budgeted direct labour hour
= 350000/65000
Overhead application rate = 5.38 per labour hour
2. Total cost of job :
| Direct material | 110500 |
| Direct labour | 70000 |
| Overhead applied (70000*135%) | 94500 |
| Total cost | 275000 |
