60.1K

Verified Solution

Link Copied!

Craig's has asked you to do some job costing for the company. He wants to assure he is charging his customers the right prices and making a profit.

You suggest that he allocates overhead to each job based on the number of direct labor hours spent on that job. At the beginning of the year, you estimate its overhead for the coming year would be $37,500. After talking with Craig, it is also anticipated that the company will be using 2,500 direct labor hours for the year. In October, Craig started and completed the following two jobs:

	Job 101	Job 102
Direct Materials Used	$5,250	$1,300
Direct Labor Hours Used	195	76

Craig paid an average of $24 per hour wage rate to the employees who worked on these two jobs. Craig billed the customer for Job 101 $15,000 and $6,000 for Job 102.

Instructions Job Costing I Job Costing II A B C C D D 1. Calculate the predetermined overhead rate: Predetermined overhead rate (in dollars) F E G H = = 2. Calculate the Overhead to be allocated to each of the two jobs based on direct labor hours. Job 101: 3. What is the Total cost of Job 101 and Job 102: 4. Craig billed $15,000 for job 101 and $6,000 for Job 102 . Which job was more profitable in terms of gross profit dollars and gross profit percentage? \begin{tabular}{|l|l|l|l|l|} \hline & & & \\ \hline & & Job \#101 & Job \#102 \\ \hline Sales & & & \\ \hline Job Cost & & \\ \hline Gross Profit & & \\ \hline Gross Profit Percentage & & \\ \hline & & & \\ \hline \end{tabular} Which factor (gross profit in dollar or \%) do you think is more important for Craig to focus on for other overall successs of the company? Why

Answer & Explanation Solved by verified expert

See Answer