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

Overhead application rate = Estimated total manufacturing overhead cost / Estimated total direct labor hours

Estimated total manufacturing overhead cost = $1,000,000
Estimated total direct labor hours = 180,000

Overhead application rate = $1,000,000 / 180,000 = $5.56 (rounded to the nearest whole dollar)

Phillips Company Phillips Company Uses a Job-Order Costing System