Question

Finn Ltd., a manufacturer of cars, applies overhead based on direct labour hours. For 20x3, total overhead is estimated to be $1608428 and total direct labour hours are estimated to be 158990.

Finn is working on Job 24, which currently has $32642 in direct materials and 480 hours (at a rate of $16 per hour) of direct labour attached to it. Below is the expected costs to complete the job:

Direct materials	$17399
Direct labour hours	538 hours

What is the total expected cost for Job 24?

Answer 1

Overhead Rate= Total overhead/ Total Direct labour hours

=$1608428/$158990=$ 10.12/direct labour hr (approx)

	Cost incurred till date (A)	Cost to be incurred to complete the job (B)	Total Expected Cost (A+B)
Direct Material	$32642	$17399	$50041
Direct Labour	480×$16=$7680	538×$16=$8608	$16288
Overhead	480×10.12=$4857.6	538×10.12=$5444.56	$10302.16
		Total	$76631.16

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