Question

3 - Assignment i Swed NWT Consultants, located in Yellowknife, Northwest Territories, is a small but growing business that analyzes a variety of construction materials before they are used by contractors. The testing procedures are specific to the individual materials used because reagents used for testing react differently based on their composition and the quantity used. How they are introduced into the materials for testing is also important During the month of December 2021, NWT completed 36 different jobs. Records pertaining to one such job (reference number: MT 2421-442) are as follows: Date 2/12/21 4/12/21 11/12/22 13/12/21 20/12/21 22/12/21 Document M-3316 L-4423 L-4437 H-3399 H-3407 L-4509 Amount 5 798 550 500 1,200 560 960 The documents with the references Mand L pertain to direct materials and direct labour, respectively. NWT currently allocates overhead using direct labour cost as the allocation base. For the year 2021, it estimated $572.330 as the overhead amount an $473,000 for direct labour costs. Required: 1. Compute the overhead allocation rate for 2021 Predatormined overhead rale % 2. Compute the total costs of the job. Amount Direct materials Direct labour ul

please explain the solution so i can study it.

Answer 1

​​​1.

Predetermined Rate = Budgeted Overhead/ Budgeted Direct Labor Cost

= $572,330/$473,000

= 1.21

You can take the rate as 1.21 or as 121% (1.21*100)

2.

Total Cost Of The Job

​​​​​​ Direct Materials ($790+$1,200+$560) = $2,550

Direct Labor ($550+$500+$960) = $2,010

Overhead ($2,010*121%) = $2,432.1

Total Cost = $6,992.1

Job Sheet

Direct Materials	Direct Labor	Over Heads
Req. No	Amount	Time Sheet	Amount	DL.Cost	Rate	Amount
M-3316	$790	L-4423	$550	$2,010	121%	$2432.1
M-3399	$1,200	L-4437	$500
M-3407	$560	L-4509	$960
Total	$2,550	Total	$2,010	Total		$2,432.1

Total Cost For the Job is $6,992.1