Question

# SHIM & SHS Company uses a job-order costing system. The company applies manufacturing overhead to jobs...

SHIM & SHS Company uses a job-order costing system. The company applies manufacturing overhead to jobs using a predetermined overhead rate based on labor-hours. Beginning of the year, manufacturing overhead and labor-hours were estimated at \$160,000 and 40,000 hours respectively, for the year. In June, Job #100 was completed. Materials costs on the job totaled \$3,000 and labor costs totaled \$4,800 at \$6 per hour. Job #100 required 800 labor hours and 1,000 machine hours. At the end of the year, it was determined that the company worked 15,000 labor-hours and 45,000 machine hours for the year, and incurred \$190,000 in actual manufacturing overhead costs.

Required:

a. Calculate the predetermined overhead rate for the year.

b. Determine the total costs of Job #100.

c. Assuming that 100 units were completed, determine the unit cost that would appear on the job cost sheet for Job #100 8

d. If SHIM & SHS want to charge to its customer at 40% markup on cost, how much SHIM & SHS charge for Job #100?

 a.) Predetermined Overhead rate \$ 4 Per DLH =160000/40000 (Estimated Overhead / Estimated labor hours ) b.) Job #100 Amount \$ Material Costs 3,000 Labor Costs 4,800 Applied Overhead ( 800 x 4 ) 3,200 Total Cost of Jon #100 \$ 11,000 c.) Unit cost for job #100 \$ 110 Per Unit =11000/100 d.) SHIM & SHS charge for Job #100 \$ 15,400 =11000*140%

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