Job Costs Using a Plantwide Overhead Rate

Perrin Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $437,500, and budgeted direct labor hours were 25,000. The average wage rate for direct labor is expected to be $35 per hour. During June, Perrin Company worked on four jobs. Data relating to these four jobs follow:

	Job 39	Job 40	Job 41	Job 42
Beginning balance	$26,700	$35,600	$19,100	$1,300
Materials requisitioned	20,100	20,000	11,700	14,300
Direct labor cost	11,200	17,100	6,350	5,200

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 125 percent of cost. Job 40 is the only job in Finished Goods Inventory and will remain there until the customer accepts delivery and pays. Jobs 41 and 42 remain unfinished at the end of the month.

Required:

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1. Calculate the overhead rate based on direct labor cost.

fill in the blank 402a2af79ffdff4_1 % of direct labor cost

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2. Set up a simple job-order cost sheet for all jobs in process during June.

	Job 39	Job 40	Job 41	Job 42
Balance: June 1	$fill in the blank a138e9fbef86037_1	$fill in the blank a138e9fbef86037_2	$fill in the blank a138e9fbef86037_3	$fill in the blank a138e9fbef86037_4
Beginning balance, Work-In-ProcessCost of goods soldDirect materialsEnding balance, Work-in-ProcessMaterials handling	- Select -	- Select -	- Select -	- Select -
Beginning balance, Work-In-ProcessCost of goods soldDirect laborEnding balance, Work-in-ProcessMaterials handling	- Select -	- Select -	- Select -	- Select -
Applied overheadBeginning balance, Work-In-ProcessCost of goods soldEnding balance, Work-in-ProcessMaterials handling	- Select -	- Select -	- Select -	- Select -
Total	$fill in the blank a138e9fbef86037_20	$fill in the blank a138e9fbef86037_21	$fill in the blank a138e9fbef86037_22	$fill in the blank a138e9fbef86037_23

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3. What if the expected direct labor rate at the beginning of the year was $28 instead of $35? What would the overhead rate be? If required, round your overhead rate answer to one decimal place.

New budgeted direct labor cost =

New overhead rate = % of direct labor cost