Branin Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $160,000, variable manufacturing overhead of $3.40 per direct labor- hour, and 80,000 direct labor-hours. The company has provided the following data concerning Job A578 which was recently completed: Total direct labor-hours 250 Direct materials $ 715 Direct labor cost $ 9,000 The total job cost for Job A578 is closest to ______.

A. $8.80 per direct labor-hourB. $2.00 per direct labor-hourC. $3.40 per direct labor-hourD. $5.40 per direct labor-hour

Question

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andromache andromache · Answer 1 · 2020-03-26T08:12:02+01:00

Answer:

D. $5.40 per direct labor-hour and $11,065

Explanation:

The computation of the total job cost is shown below

= Direct material cost + direct labor cost + direct labor hours × predetermined overhead rate

= $715 + $9,000 250 hours × $5.4

= $715 + $9,000 + $1,350

= $11,065

The predetermined overhead rate is come from

= Total fixed manufacturing overhead cost ÷ direct labor hours + variable manufacturing overhead cost per direct labor hours

= $160,000 ÷ 80,000 direct labor hours + $3.40

= $2 + $3.40

= $5.40