Gill Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost.At the beginning of the year,Gill estimated total manufacturing overhead costs at $1,050,000 and total direct labor costs at $820,000.In June,Gill completed Job 511.The details of Job 511 are shown below.(Round to 2 decimal places.) $$\begin{array} { | l | r | }
\hline \text { Direct materials cost } & \$ 26,500 \
\hline \text { Direct labor cost } & \$ 10,000 \
\hline \text { Direct labor hours } & 300 \text { hours } \
\hline \text { Units of product produced } & 200 \text { units } \
\hline
\end{array}$$
How much was the total job cost of Job 511? (Round any percentages to two decimal places and your final answer to the nearest dollar.)

Question

Gill Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost.At the beginning of the year,Gill estimated total manufacturing overhead costs at $1,050,000 and total direct labor costs at $820,000.In June,Gill completed Job 511.The details of Job 511 are shown below.(Round to 2 decimal places.) $$\begin{array} { | l | r | } 
\hline \text { Direct materials cost } & \$ 26,500 \
\hline \text { Direct labor cost } & \$ 10,000 \
\hline \text { Direct labor hours } & 300 \text { hours } \
\hline \text { Units of product produced } & 200 \text { units } \
\hline
\end{array}$$
 How much was the total job cost of Job 511? (Round any percentages to two decimal places and your final answer to the nearest dollar.)

Quizplus · Accepted Answer

The predetermined overhead rate is calculated as $1,050,000 / $820,000 = 1.28 or 128%. The overhead allocated to Job 511 is 128% of $10,000 = $12,800. The total job cost is the sum of direct materials, direct labor, and allocated overhead: $26,500 + $10,000 + $12,800 = $49,300.

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