The BeautyWorks Corporation manufactures custom-made purses.The following data pertains to Job AAA: Factory overhead is applied using a plantwide rate that is based on direct labour hours.Factory overhead was budgeted at $120,000 for the year,and the direct labour hours were estimated to be 30,000.Job AAA consists of 50 units.What is the overhead cost assigned to Job AAA?
$\begin{array}{ll}
\text { Direct materials placed into production } & \$ 4,000 \
\text { Direct labour hours worked } & 60 \text { hours } \
\text { Direct labour rate per hour } & \$ 15 \
\text { Machine hours worked } & 100 \text { hours }
\end{array}$

Question

Quizplus · Accepted Answer

The overhead cost assigned to Job AAA is calculated using the plantwide rate based on direct labour hours. The plantwide rate is found by dividing the total budgeted factory overhead ($120,000) by the total estimated direct labour hours (30,000 hours), which equals $4 per direct labour hour. For Job AAA, with 60 direct labour hours worked, the overhead cost is 60 hours * $4/hour = $240.

The BeautyWorks Corporation Manufactures Custom-Made Purses A)$240 B)$400 C)$750 D)$1,500

The BeautyWorks Corporation Manufactures Custom-Made Purses A)$240
B)$400
C)$750
D)$1,500