Session Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Recently, Job K913 was completed with the following characteristics:
The total job cost for Job K913 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $6,060
B) $2,115
C) $6,765
D) $5,355

Question

Session Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data:  Recently, Job K913 was completed with the following characteristics:
 The total job cost for Job K913 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $6,060 
B) $2,115 
C) $6,765 
D) $5,355

Quizplus · Accepted Answer

First, we need to calculate the total amount of overhead applied to Job K913:

Overhead rate = Estimated total overhead costs / Estimated total direct labor hours
= $245,000 / 35,000 = $7.00 per direct labor hour

Overhead applied to Job K913 = Direct labor hours for Job K913 x Overhead rate
= 187 x $7.00 = $1,309

Next, we need to calculate the total manufacturing cost for Job K913:

Total manufacturing cost = Direct materials + Direct labor + Manufacturing overhead applied
= $2,750 + $2,718 + $1,309
= $6,777

Finally, we can calculate the total job cost by adding any additional costs (such as selling and administrative costs), but since no additional information is given, we can assume that the total job cost is equal to the total manufacturing cost:

Total job cost for Job K913 = $6,777, which is closest to choice C.

Session Corporation Uses a Job-Order Costing System with a Single