Moran Company uses a job order cost system and has established a predetermined overhead application rate for the current year of 150% of direct labor cost,based on budgeted overhead of $900,000 and budgeted direct labor cost of $600,000.Job no.1 was charged with direct materials of $36,000 and with overhead of $27,000.What is the total cost of job no.1?
A)$64,000.
B)$81,000.
C)$91,000.
D)Cannot be determined without additional information.

Question

Quizplus · Accepted Answer

To calculate the total cost of job no.1, we need to add the direct materials cost, direct labor cost, and overhead cost. However, we are not given the direct labor cost for job no.1.

Using the predetermined overhead application rate, we can calculate the overhead cost applied to job no.1:
Overhead cost applied = 150% x Direct labor cost
$27,000 = 150% x Direct labor cost
Direct labor cost = $18,000

Therefore, the total cost of job no.1 is:
Total cost = Direct materials cost + Direct labor cost + Overhead cost applied
Total cost = $36,000 + $18,000 + $27,000
Total cost = $81,000

Thus, the correct answer is B) $81,000.

Moran Company Uses a Job Order Cost System and Has