The Huyden Company builds equipment to customer\'s specifications. On March 1, t
ID: 2705545 • Letter: T
Question
The Huyden Company builds equipment to customer's specifications. On March 1, two jobs were in process with the following costs and information:
Job 43
Job 44
Direct materials
$10,200
$34,400
Direct labor
21,000
10,400
Applied overhead*
4,950
7,370
Total cost
$36,150
$52,170
Machine hours
45
67
*Applied on the basis of machine hours
During March, Job 45 was started and Job 44 was completed and delivered to the customer. Job 43 was missing a part that was backordered and would be completed in June. The following costs were incurred in March:
Job 43
Job 44
Job 45
Direct materials
$2,300
$4,500
$12,700
Direct labor
$2,400
$3,300
$4,500
Machine hours
21
11
23
It is Huyden's policy to bill clients at cost plus 40 percent.
Required:
a.
Calculate the overhead rate that Huyden is using.
b.
Calculate the overhead applied to each job during the month of March.
c.
Calculate the balance in work in process on March 31.
d.
What was the price of Job 44?
Job 43
Job 44
Direct materials
$10,200
$34,400
Direct labor
21,000
10,400
Applied overhead*
4,950
7,370
Total cost
$36,150
$52,170
Machine hours
45
67
Explanation / Answer
A.
4950/45=110
7370/67=110
The overhead rate is $110 per machine hour.
B.
Job 43 21*110= $2310
Job 44 11*110= $1210
Job 45 23*110= $2530
D.
(total cost of project until March 1st+March Direct Materials+March Direct Labor+March Applied Overhead)*1.4
or
(complete price of project to completion)*1.4 = price to client
1.4= 1+0.4
1 is the total cost of project until complettion
0.4 is additional percentage of the total cost the firm charges for production
added together, it gives you the multiplier to find the price of Job 44 to bill client
($52,170+$4,500+$3,300+$1,210)*1.4= 85,652
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