Homework SourseExercise 154 Overhead rate costs assigned to jobs LO P3 In D
Exercise 15-4 Overhead rate; costs assigned to jobs LO P3 In December 2014, Shire Computer\'s management establishes the 2015 predetermined overhead rate based on direct labor cost. The information used in setting this rate includes estimates that the company will ncur $775,500 of overhead costs and $550,000 of direct labor cost in year 2015. During March 2015, Shire began and completed Job No. 13-56. 1. What is the predetermined overhead rate for year 2015 Overhead Rate Choose Numerator: Choose Denominator: Overhead Rate -Overhead rate
Solution
Answer
Overhead Rate
Choose Numerator
/
Choose Denominator
=
Overhead Rate
Overhead Cost
/
Direct Labor Cost
=
Overhead Rate
775,500
/
550,000
=
141%
Overhead Rate is 141% of Direct Labor Cost
2.
Job Cost Sheet
Direct Material
Direct Labor
Overhead
Total Cost
Date
Requisition No.
Amount
Time-Ticket No.
Amount
Cost Applied
8-Mar
4-129
6,000
T-306
600
846.0 (600*141%)
11-Mar
4-142
7,150
T-432
1,270
1,790.7
(1,270*141%)
18-Mar
4-167
3,550
T-456
1,340
1,889.4
(1,340*141%)
16,700
3,210
4,526.1
24,436.1
| Overhead Rate | ||||
| Choose Numerator | / | Choose Denominator | = | Overhead Rate |
| Overhead Cost | / | Direct Labor Cost | = | Overhead Rate |
| 775,500 | / | 550,000 | = | 141% |
