Question

# Simpson Company estimates that its overhead expense will stand at \$4,000,000 this year. It also expects...

Simpson Company estimates that its overhead expense will stand at \$4,000,000 this year. It also expects the direct labor cost to be \$2,000,000. It traditionally applies overhead using direct labor cost as its basis. Job No. 305 is charged with \$150,000 of direct materials costs and \$100,000 of direct labor cost.

Calculate the predetermined overhead rate for Simpson Company

Calculate the total manufacturing costs for Job No. 305.

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 Simpson Company Answer 1 Particulars Amount \$ Note Budgeted overhead expense 4,000,000.00 A Budgeted direct labor cost 2,000,000.00 B Predetermined overhead rate 200.00% C=A/B Workings for Answer 2 Amount \$ Labor cost of Job 305 150,000.00 D Predetermined overhead rate 200.00% See C Overhead applied 300,000.00 E=D*C Final Answer 2 Amount \$ Direct materials costs 100,000.00 Labor cost 150,000.00 Overhead applied 300,000.00 See E Total manufacturing costs for Job No. 305 550,000.00

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