In December 2016 Shire Computers management establishes the

In December 2016, Shire Computer\'s management establishes the 2017 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will incur $765,000 of overhead costs and $510,000 of direct labor cost in year 2017 During March 2017, Shire began and completed Job 13-56. 1. What is the predetermined overhead rate for 2017? 2. Using the information on the following job cost sheet, determine the total cost of the job. Complete this question by entering your answers in the tabs below Required 1 Required 2 What is the predetermined overhead rate for 2017? Choose Numerator: Choose Denominator:Overhead Rate Overhead rate

Solution

1 Estimated overhead costs/Estimated direct labor = Overhead rate 765000/510000= 150% 2 Direct materials Direct labor Overhead Total Date Req. no Amount Time ticket no Amount Costs applied 8-Mar 4-129 6000 T-306 670 1005 7675 11-Mar 4-142 6600 T-432 1310 1965 9875 18-Mar 4-167 3900 T-456 1310 1965 7175 16500 3290 4935 24725