Question

Princeton Computer Company uses a job order costing system in which each batch manufactured is a different job. Princeton Computer Company assigns direct materials and direct labor to each joo. The company assigns labor costs at $15 per hour, It allocates manufacturing overhead to jobs based on a predetermined overmead allocation rate, computed as a peroentage of dlirect labor costs. At the beginning of 2020, the controller prepared the following budget: ll Click the icon to view the budget.) In November 2020, Princeton Computer Company worked on several jobs. Records for two jobs appear here: (Click the icon to view the records for the two jobs) Read the requirementa. Requirement 1. Compute Princetorn Cormputer Corpany's predetermined overhead (OH) allocalion rate for 2020. - Predetermined OH allocation rate Requirement 2. Compute the tolal cost of each job Job 721 Job 722 Total cost Requirement 3. Why does Princeton assign costa to jobs? Princeton Computer Company assigns costs to jobs to help the company V that cover all costs and contribute to prolit. Assigning costs to V also can help Princeton Data Table Data Table Job 721 Job 722 17,000 Manufacturing overhead 820 hours Direct labor hours 50 hours Direct labor costs S 1,170,000 Direct materials 串21,700 S 2400 PrintDone Choose from any list or enter any number in the input fields and Print Done

Answer 1

1.Predetermined Overhead rate = Manufacturing overhead/Direct Labor Costs

= 117,000/1,170,000

= 10%

2.

	Job 721	Job 722
Direct Material	21,700	2,400
Direct Labor	12,300	750
Overheads	1,230	75
Total cost	35,230	3,225