The total cost of Job X is: Badour Inc. is a job-order manufacturer. The company

Question

The total cost of Job X is:  

Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 108,600 and estimated factory overhead was $674,000. The following information was for September. Job X was completed during September, while Job Y was started but not finished. September 1, inventories: Materials $8,600 Work-in-process (All Job X) $36,100 Finished goods $76,400 Materials purchases $119,500 Direct materials requisitioned: Job X $51,600 Job Y $38,200 Direct labor hours: Job X 4,800 Job Y 4,300 Labor cost incurred: Direct labor $5.70 per hour $51,870 Indirect labor $15,500 Factory supervisory salaries $6,900 Rental costs Factory $8,200 Administrative offices $2,100 Total equipment depreciation costs: Factory $8,700 Administrative offices $1,800 Indirect materials used $13,900

The total cost of Job X is:  

Explanation / Answer

Factory overhead rate = $674,000 / 108,600 = $6.206

Calculation of total cost of Job X

Direct materials $51,600

Direct labor $27360

Factory overhead $29790

Total cost $108750

All the costs of indirect labour, supervisor's salay, rent and depreciation are included in factory overheads

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