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?

Homework Answers

Answer #1
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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