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26) In December 2016, Shire Computer’s management establishes the 2017 predetermined overhead rate based on direct labor...

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Accounting

26)

In December 2016, Shire Computer’s management establishes the2017 predetermined overhead rate based on direct labor cost. Theinformation used in setting this rate includes estimates that thecompany will incur $780,000 of overhead costs and $520,000 ofdirect labor cost in year 2017. During March 2017, Shire began andcompleted Job 13-56.

  
1. What is the predetermined overhead rate for2017?
2. Using the information on the following job costsheet, determine the total cost of the job.

Complete this questionby entering your answers in the tabsbelow.

Required 1 Required2

What is the predetermined overhead rate for 2017?

Overhead Rate

Choose Numerator / Choose Denominator = Overhead Rate

Required 2

Using the information on the following job cost sheet, determinethe total cost of the job. (Round your answers to the nearestdollar amount.)

Job Cost Sheet: Job No. 13-56

Direct Materials Direct Labor Overhead Total Cost

Date Requisition No. Amount Time- Ticket No. Amount CostsApplied

Mar.8 4-129 $7,000 T-306 $600

Mar.11 4-142 $6,950 T-432 $1,310

Mar.18 4-167 $3,450 T-456 $1,300

Answer & Explanation Solved by verified expert
3.8 Ratings (401 Votes)

Answer:

Pre determined Overhead Rate

Choose Numerator

/

Choose Denominator

=

Overhead Rate

Overhead Cost

/

Direct Labor Cost

=

Overhead Rate

$780,000

/

$520,000

=

150%

Pre determined Overhead Rate is 150% of Direct Labor Cost

2.

Job 13-56 Cost Sheet

Direct Material

Direct Labor

Overhead

Total Cost

Date

Requisition No.

Amount $

Time-Ticket No.

Amount $

Cost Applied $(150%of DL cost)

8-Mar

4-129

         7,000

T-306

            600

              900 (600*150%)

11-Mar

4-142

         6,950

T-432

         1,310

           1,965

(1,310*150%)

18-Mar

4-167

         3,450

T-456

         1,300

           1,950

(1,300*150%)

      $17,400

         3,210

           4,815

   $25,425

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