Briggs Company Briggs Company uses a job-order costing system. At the beginning of January, the company had two jobs in process with the following costs:
Briggs pays its workers $8.50 per hour and applies overhead on a direct labor hour basis.
Refer to Briggs Company. What is the overhead application rate per direct labor hour?

Question

Briggs Company Briggs Company uses a job-order costing system. At the beginning of January, the company had two jobs in process with the following costs:
 Briggs pays its workers $8.50 per hour and applies overhead on a direct labor hour basis.
Refer to Briggs Company. What is the overhead application rate per direct labor hour?

Quizplus · Accepted Answer

To calculate the overhead application rate per direct labor hour, we need to divide the estimated overhead cost by the estimated direct labor hours.

Estimated overhead cost = $340,000 + $60,000 = $400,000

Estimated direct labor hours = 80,000 + 20,000 = 100,000

Overhead application rate = Estimated overhead cost / Estimated direct labor hours = $400,000 / 100,000 = $4.00 per direct labor hour

Therefore, the correct answer is C, $4.25.

Briggs Company Briggs Company Uses a Job-Order Costing System