Question

Speedy Auto Repairs uses a job-order costing system. The company's direct customer vehicles, and its direct labor consists of the mechanics' hourly wages. Speedy's overhead costs include various items as the shop managers salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. materials con sist of rep ement parts installed in The company applies all of its overhead costs to jobs based on direct labor-hours. At the beginning of the year, it made the following estimates: Direct labor-hours required to support estimated output Fixed overhead cost 44,000 748,000 $ 1.00 nt variable overhead cost per direct labor-hour 1. Compute the predetermined overhead rate 2. During the year, Mr. Wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. The following information was available with respect to his job: 633 s 231 Direct materials Direct labor cost Direct labor-hours used Compute Mr. Wilkes' total job cost 3. If Speedy establishes its selling prices using a markup percentage of 30% of its total ob cost, then how much would it have charged Mr. Wilkes? Complete the question by entering your answers in the tabs given below. Next < Prev 6 of 8

Answer 1

1
	Direct labor hours required	44000
	Variable overhead cost per direct labor hour	1
	Total variable cost	44000
	Fixed cost	748000
	Total cost	792000
	Direct labor hours required	44000
	Predetermined overhead rate	18	Per DLH
2	Particulars	Amount
	Direct material	633
	Direct labor	231
	Overheads applied	36	(18*2)
	Total cost assigned to Mr. Wilkies	900
3	Total cost assigned to Mr. Wilkies	900
	Markup 30%	270	(900*30%)
	Amount charged to mr wilkies	1170