Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given that each construction job is different from the others, Susan Byrd, the company?s accountant, decided to use a job-order costing system to allocate costs to the different jobs. She decided to use construction labour-hours as the basis for overhead allocation. In December 2016, she estimated the following amounts for the year 2017:

Direct materials...............................$14,560,000Construction labour..........................$9,800,000Overhead............................................$7,510,000Construction labour-hours....................500,000

Byrd recorded the following for the second quarter of 2017 for the three jobs that the company started and completed during the quarter.

Required:

1. Compute the predetermined overhead allocation rate for 2017 and apply overhead to the three jobs.

2. Compute the cost of each job.

Transcribed Image Text:

Cinema School Residential Direct materials $824,000 $1,034,600 $1,425,000 Construction labour-hours 18,500 66,400 37,200