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Unformatted text preview: 7-27 Applying Overhead Using a Predetermined Rate: Marys Landscaping. Since Job No. 3318 is the only job in the account, the ending balance of the account must equal the total cost of the job. We can find the accounts ending balance using the basic cost equation: BB + TI TO = EB EB = $ 6,250 + ($40,500 + $27,000 + $21,600) $81,000 EB = $14,350 We are told that direct labor for Job No. 3318 is $3,375 and that overhead is applied at a rate of 80% of direct labor cost. So, Factory overhead = 80% x $3,375 = $2,700 To solve for direct materials we set up the cost equation, Total cost = direct materials + direct labor + factory overhead $14,350 = direct materials + $3,375 + $2,700 Direct materials = $14,350 $3,375 $2,700 Direct materials = $8,275...
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This note was uploaded on 04/03/2012 for the course COST ACCOU 101 taught by Professor Dennis during the Spring '11 term at Post.
- Spring '11