Kinney Company applies overhead on the basis of 150% of direct labor cost. Job No. 176 is charged with $150000 of direct materials costs and $180000 of manufacturing overhead. The total manufacturing costs for Job No. 176 is

Question

Quizplus · Accepted Answer

Direct labor cost can be calculated by subtracting direct material cost from total manufacturing costs: 
Direct labor cost = Total manufacturing costs - Direct material cost
Using the overhead application rate given in the problem, we can calculate the manufacturing overhead applied to Job No. 176: 
Manufacturing overhead applied = 150% x Direct labor cost
Manufacturing overhead applied = 1.5 x ($180000 - $150000) = $45000
Therefore, the total manufacturing costs for Job No. 176 is: 
Total manufacturing costs = Direct materials cost + Direct labor cost + Manufacturing overhead applied
Total manufacturing costs = $150000 + ($180000 - $150000) + $45000 = $450000

Kinney Company Applies Overhead on the Basis of 150% of Direct