Determining job costcalculation of predetermined rate for applying overhead by LO 6 direct labor cost and direct
Question:
Determining job cost—calculation of predetermined rate for applying overhead by LO6 direct labor cost and direct labor hour methods Plastic Products, Inc. has its factory divided into three departments, with individual factory overhead rates for each department. In each department, all the operations are sufficiently alike for the department to be regarded as a cost center. The estimated monthly factory overhead for the departments are as follows: Forming, $64,000; Shaping, $36,000; and Finishing, $10,080. The estimated production data include the following:
Required:
Determine the cost of LS400. Assume that the factory overhead is applied to production orders, based on the following:
1. Direct labor cost 2. Direct labor hours
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