Question

# In its job-order costing system, Morris Equipment Company uses a predetermined overhead rate based on direct...

In its job-order costing system, Morris Equipment Company uses a predetermined overhead rate based on direct labor-hours. At the start of the year, MOH cost was estimated at \$100,000 for the year. And, the number of DL hours to be used during the year was estimated at 40,000.

In September, Job #274 was completed at a cost of \$5,000 in direct materials and \$2,400 in direct labor. The labor rate is \$6 per hour. By the end of the year, Morris had used a total of 45,000 direct labor-hours and had incurred \$110,250 actual MOH cost.

If Job #274 contained 200 units, the unit product cost on the this job would be:

--Unit Product Cost on the Job # 274 = \$ 42 per unit

 A Estimated MOH \$100,000 B Estimated DL 40000 C= A/B Overhead rate per DL \$2.50 D Direct labor cost for Job #274 \$2,400 E Labor rate \$6.00 F = D/E DLHs used 400 G Direct material cost \$5,000 H = D Direct labor cost for Job #274 \$2,400 I = C x F Overhead cost allocated \$1,000 J = G+H+I Total cost for Job #274 \$8,400 K Units 200 L = J/K Unit Product Cost \$42.00 [Answer]

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