Venus Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost.At the beginning of the year,it estimated the manufacturing overhead rate to be 20% of the direct labor cost.In the month of June,Venus completed Job 13C and its details are as follows: $$\begin{array} { | l | r | }
\hline \text { Direct materials cost } & \$ 6,360 \
\hline \text { Direct labor cost } & \$ 20,000 \
\hline \text { Direct labor hours } & 34 \text { hours } \
\hline \text { Units of product produced } & 220 \
\hline
\end{array}$$ What is the total cost incurred for Job 13C?

Question

Venus Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost.At the beginning of the year,it estimated the manufacturing overhead rate to be 20% of the direct labor cost.In the month of June,Venus completed Job 13C and its details are as follows: $$\begin{array} { | l | r | } 
\hline \text { Direct materials cost } & \$ 6,360 \
\hline \text { Direct labor cost } & \$ 20,000 \
\hline \text { Direct labor hours } & 34 \text { hours } \
\hline \text { Units of product produced } & 220 \
\hline
\end{array}$$ What is the total cost incurred for Job 13C?

Quizplus · Accepted Answer

The total cost for Job 13C includes direct materials, direct labor, and applied manufacturing overhead. The overhead is 20% of the direct labor cost, which is $20,000. So, overhead = 0.20 * $20,000 = $4,000. Total cost = Direct materials ($6,360) + Direct labor ($20,000) + Overhead ($4,000) = $30,360.

Venus Manufacturing Uses a Predetermined Overhead Allocation Rate Based on a Percentage