Question

Biotechnologies Unlimited, Inc. (BUI), located in Sydney, Nova Scotia, is a small but growing biotech quality analysis organization that tests pesticides before they are used by farmers. The testing procedures are specific to the individual pesticides used because reagents used for testing react differently based on their composition and the quantity used. How they are introduced into the pesticides for testing is also important. During the month of December 2014, it completed one job (reference number. KS 2014-337), records pertaining to this job are as follows: Date 2/12/14 4/12/14 11/12/14 13/12/14 20/12/14 22/12/14 Document M-3316 L-4423 L-4437 M-3399 M-3407 L-4509 Amount $ 750 440 250 1,000 320 750 The documents with the references M and L pertain to direct materials and direct labour, respectively. BUL currently allocates overhead using direct labour cost as the allocation base. For the year 2014, it estimated $548,730 as the overhead amount and $469,000 for direct labour costs. Required: 1. Compute the overhead allocation rate for 2014. Predetermined overhead rate 2. Compute the total costs of the job. (Round "Overhead" answer to 2 decimal places.)

Answer 1

1	Predetermined overhead rate=Estimated overhead/Estimated direct labor costs=548730/469000=1.17=117% of direct labor cost
2	Total cost of the job
					$	$
	Direct materials:
	M-3316				750
	M-3399				1000
	M-3407				320	2070
	Direct labor:
	L-4423				440
	L-4437				250
	L-4509				750	1440
	Overhead		(1440*117%)			1684.8
	Total					5194.8
3				Job cost sheet
	Number	KS2014-337			Date initiated		Dec 01,2014
	Department	Commercial			Date completed		May 23,2014
	Description	Pesticide testing			Units completed
	Direct materials		Direct labor			Overhead
	Req. No.	Amount	Time-sheet	Hours	Amount	DL cost	Rate	Amount
	M-3316	750	L-4423		440	1440	117%	1684.8
	M-3399	1000	L-4437		250
	M-3407	320	L-4509		750
		2070			1440
	Cost summary				Job completion status
			$		Date	Progress to date
	Direct materials		2070
	Direct labor		1440
	Overhead		1684.8
	Total cost		5194.8
	Unit cost