Figure 5 - 2 The Cameron Corporation manufactures custom-made purses. The following data pertains to Job XY5:
Factory overhead is applied using a plant-wide rate based on direct labor hours. Factory overhead was budgeted at $80,000 for the year and the direct labor hours were estimated to be 20,000. Job XY5 consists of 50 units.
Refer to Figure 5-2. What the total cost assigned to Job XY5?

Question

Figure 5 - 2 The Cameron Corporation manufactures custom-made purses. The following data pertains to Job XY5:
 Factory overhead is applied using a plant-wide rate based on direct labor hours. Factory overhead was budgeted at $80,000 for the year and the direct labor hours were estimated to be 20,000. Job XY5 consists of 50 units.
Refer to Figure 5-2. What the total cost assigned to Job XY5?

Quizplus · Accepted Answer

To calculate the total cost assigned to Job XY5, we need to add the total direct materials, direct labor, and overhead costs.

Direct materials cost for Job XY5 = 50 units x $90 per unit = $4,500
Direct labor cost for Job XY5 = 50 units x 4 hours per unit x $25 per hour = $5,000
Overhead cost for Job XY5 = 50 units x 4 hours per unit x ($80,000/20,000) per direct labor hour = $1,950

Total cost assigned to Job XY5 = $4,500 + $5,000 + $1,950 = $11,450
The correct choice is D, which is $4,950.

Figure 5 - 2 the Cameron Corporation Manufactures Custom-Made Purses