A compeny hes identfhed the following overheed costs and cost drivers for the co

Question

A compeny hes identfhed the following overheed costs and cost drivers for the coming year Overhead Item Cost Driver Budgeted Cost 13,600 90,300 160 Inspection Number of Inspections Material hendling Number of matenal moves Engineertng hours 4,000 560 Budgeted direct labor cost was $95,350 and budgeted direct material cost was $262,980. The following Information was collected on three jobs that were completed during the year eh 101ob 10 ob 102Job 103 Direct materials Direct labor Units completed Number of setups Number of inspections Number of material moves $ 3,500 $ 8,500 $4,500 1,600 50 1600 25 150 10 neering hours If the company uses treditonal costing and allocates overheed using direct labor cost how much overheod cost should be assigned to Job 1012 $615 ? $3.200 o $1,600. O Type here to search up

Explanation / Answer

Budgeted direct labor cost = 95,350

Budgeted overheads cost $190,700

Overhead cost per $1 of direct labour cost =$190,700/$95,350

= $ 2 per dollar of direct labour cost

So, overhead cost to be assigned to job101 is $3,200 ($1600X2)

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