job cost example for Ch 15

job cost example for Ch 15 - amont of overhead to be...

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Cost Allocation Demo Problem Job Order Manufacturing Costs For the Month Ended April 30, 2010 Overhead Total Costs Goods in Finished Cost of Description Materials Labor Incurred Est rate Allocated to Produce Process Goods Goods Sold Job B15 600 1,500 160% 2,400 4,500 4,500 Job B16 300 1,000 160% 1,600 2,900 2,900 Job B17 500 1,700 160% 2,720 4,920 4,920 Total job costs 1,400 4,200 6,720 12,320 4,920 2,900 4,500 Indirect materials 550 550 Indirect Labor 1,100 1,100 Other overhead 5,070 Total OVERHEAD INCURRED 6,720 total overhead EXPECTED to be incurred FOR THE YEAR divided by the total direct labor EXPECTED to be incurred and that is the
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Unformatted text preview: amont of overhead to be APPLIED to each job. Therefore management estimated that total overhead for the YEAR would be $200,000 and total direct labor for the YEAR would be $125,000 which means $200,000/$125,000 is 160% of direct labor cost for any period within the year. You now multiply the total direct labor INCURRED ON EACH JOB by 160% to get the amount of overhead to allocate to each job. Overhead is allocated as a function of direct labor for these jobs using a predetermined overhead rate. That means that you take the...
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This note was uploaded on 02/01/2011 for the course ACCT 203 taught by Professor Hylton during the Summer '08 term at George Mason.

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