Chapman Company Chapman Company uses a job-order costing system.At the beginning of March,the company had two jobs in process with the following costs:

Direct Material Direct Labor Overhead

Job #456 $3,400 $510 $255

Job #461 1,100 289 ?

Chapman pays its workers $8.50 per hour and applies overhead on a direct labor hour basis. Refer to Chapman Company.How much overhead was included in the cost of Job #461 at the beginning of March?

Question

Chapman Company Chapman Company uses a job-order costing system.At the beginning of March,the company had two jobs in process with the following costs:

	Direct Material	Direct Labor	Overhead
Job #456	$3,400	$510	$255
Job #461	1,100	289	?

Chapman pays its workers $8.50 per hour and applies overhead on a direct labor hour basis. Refer to Chapman Company.How much overhead was included in the cost of Job #461 at the beginning of March?

Quizplus · Accepted Answer

The direct labor cost for Job #461 is $289. Given the wage rate of $8.50 per hour, the direct labor hours are $289 / $8.50 = 34 hours. The overhead for Job #456 is $255 for 60 hours (since $510 / $8.50 = 60 hours), so the overhead rate is $255 / 60 = $4.25 per hour. Therefore, the overhead for Job #461 is 34 hours * $4.25 = $144.50.

Chapman Company Chapman Company Uses a Job-Order Costing System.At the Beginning of Beginning