Question

Shire Computer’s predetermined overhead rate is based on direct labor cost. Management estimates the company will incur $747,500 of overhead costs and $575,000 of direct labor cost for the year. During March, Shire began and completed Job 13-56.

1. What is the predetermined overhead rate for the year?
2. Use the information on the following job cost sheet to determine the total cost of the job

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2

What is the predetermined overhead rate for the year?

Overhead Rate
Choose Numerator:	/	Choose Denominator:	=	Overhead Rate
	/		=	Overhead rate
	/		=

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2

Using the information on the following job cost sheet, determine the total cost of the job.

	JOB COST SHEET
Customer’s Name: Keiser Co.					Job No. 13-56
Job Description: 5 plasma monitors—61 inch
	Direct Materials		Direct Labor		Overhead	Total Cost
Date	Requisition No.	Amount	Time-Ticket No.	Amount	Costs Applied
Mar. 8	4-129	$5,000	T-306	$700
Mar. 11	4-142	7,020	T-432	1,250
Mar. 18	4-167	3,330	T-456	1,250

Answer 1

Solution 1:

Overhead Rate
Choose Numerator:	/	Choose Denominator:	=	Overhead Rate
Estimated overhead	/	Estimated direct labor costs	=	Overhead rate
747500	/	575000	=	130%

Solution 2:

Job Cost Sheet Job 13-56
	Direct Materials	Direct labor	Overhead	Total Costs
Date	Requisition No.	Amount	Time Ticket No.	Amount	Costs Applied
8-march	4-129	$5,000	T-306	$700	$910
11-march	4-142	$7,020	T-432	$1,250	$1,625
18-march	4-167	$3,330	T-456	$1,250	$1,625
		$15,350		$3,200	$4,160	$22,710