Phillips Company Phillips Company uses a job-order costing system. Assume that Job #309 is the only one in process. The following information is available:
Refer to Phillips Company. What is the overhead application rate if Miller uses a predetermined overhead application rate based on direct labor hours (rounded to the nearest whole dollar)?

Question

Phillips Company Phillips Company uses a job-order costing system. Assume that Job #309 is the only one in process. The following information is available:
 Refer to Phillips Company. What is the overhead application rate if Miller uses a predetermined overhead application rate based on direct labor hours (rounded to the nearest whole dollar)?

Quizplus · Accepted Answer

The predetermined overhead application rate is calculated as follows:
Estimated total manufacturing overhead / Estimated total direct labor hours
= $100,000 / 18,000 DLH
= $5.56 per DLH (rounded to the nearest whole dollar)

Phillips Company Phillips Company Uses a Job-Order Costing System