Question

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 $18.50 per hour. During the year, the company started and completed only two jobs, Job Alpha, which used 62,300 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 $ 2,300,000 Job Omega Direct materials Direct labor Manufacturing overhead applied Total job cost $ 339,800 458,800 285,200 $1,083,800 Required: 1. Calculate the plantwide predetermined overhead rate. 2. Complete the job cost sheet for Job Alpha.

Answer 1

Plantwide predetermined overhead rate	=	$                        11.50	per DLH
Job Alpha
Direct material	=	$                  4,31,000
Direct labor	=	$                11,52,550
Manufacturing overhead applied	=	$                  7,16,450
Total job cost	=	$                23,00,000
Workings:
Plantwide predetermined overhead rate	=	Manufacturing overhead applied Omega / Direct labor hours
	=	$285200 / 24800
	=	$                        11.50	per DLH
Direct labor hours	=	$458800 / $18.50
	=	24800	DLH
Job Alpha
Direct material	=	(Balancing figure)	=	$          4,31,000
Direct labor	=	62300 X $18.50	=	$       11,52,550
Manufacturing overhead applied	=	62300 X $11.50	=	$          7,16,450
Total job cost	=			$       23,00,000