tml Chapter 2 H Help Save Exit Submit 8 Exercise 214 JobOrd

tml Chapter 2 H Help Save & Exit Submit 8 Exercise 2-14 Job-Order Costing for a Service Company [LO2-1, LO2-2, LO2-3] 1.66 points such as costumes and props. Its direct labor includes each film\'s actors, di costs include items such as utilities, depreciation of equipment, senior management salaries, and wages of maintenance workers. Yancey applies its overhead cost to fims based on direct labor-doliars At the beginning of the year, Yancey made the following estimates: materials consist of items directors, and extras. The company\'s overhead Fixed overhead acost 7,300,000 4,380,000 0.06 1. Compute the predetermined overhead rate. 2. During the year, Yancey produce d a film titled You Can Say That Again that incurred the following costs 1,412,000 s 2,190,000 Direct 1abor cost Compute the total job cost for this particular film 43 23

Solution

(1)

Since problem has given fixed overhead and variable overhead per allocation base, so first step is to calculate total overhead cost.

So Total overhead cost     = $4,380,000 + $7,300,000 x 0.06

                                      = $4,818,000

Now Predetermined overhead rate:

= Estimated total manufacturing overhead cost ÷ estimated total amount of allocation base

= $4,818,000 ÷ $7,300,000

= $0.66 per direct labor dollar

(2)

Direct materials

$1,412,000

Direct labor

         2,190,000

Overhead applied

         1,445,400

(2190000 x 0.66)

Total Job costs

$5,047,400

Direct materials	$1,412,000
Direct labor	2,190,000
Overhead applied	1,445,400	(2190000 x 0.66)
Total Job costs	$5,047,400