34 Direct Dirt Direct Job 400 $200 $800 40 Job 401 250 200 10 Job 402 500 600 32 Sparkle Company uses job costing and applies overhead using an actual costing system using direct labour hours as the allocation base. This period's estimated overhead cost is $400,000, estimated direct labour cost is $500,000 and estimated direct labour hours are 25,000. This period's actual overhead cost was $420,000, actual direct labour cost was $390,000, and actual direct labour hours were 20,000 What is the overhead allocation rate? a) $21/hour b) $10/hour c) $16/hour d) $18/hour Answer: a Difficulty: Easy Learning Objective: Allocate overhead costs to individual jobs. 35. Direct Direct Direct Job 400 $200 $800 40 Job 401 250 200 10 Job 402 500 600 32 Sparkle Company uses job costing and applies overhead using an actual costing system using direct labour hours as the allocation base. This period's estimated overhead cost is $400,000, estimated direct labour cost is $500,000 and estimated direct labour hours are 25,000. This period's actual overhead cost was $420,000, actual direct labour cost was $390,000, and actual direct labour hours were 20,000 What is the total manufacturing cost of Job 402? a) $1,100 b) $1,772 c) $1,320 d) $1,640 Answer: b Difficulty: Easy 36. Client 57 $2,000 $800 20 Client 58 ,000 200 10 Client 59 5,000 600 50 Bhavik's Accounting Services uses job costing and applies overhead using a normal costing system using professional labour hours as the allocation base. This period's estimated overhead cost is $400,000, estimated professional labour cost is $800,000 and estimated direct labour hours are 8,000. This period actual overhead cost was $426,400, actual direct labour cost was $820,000, and actual direct labour hours were 8,200 What is the overhead allocation rate? a) $60/hour b) $55/hour c) $52/hour d) $50/hour Answer: d Difficulty: Easy Learning Objective: Allocate overhead costs to individual jobs. CPA: Management Accounting 37 Client 57 $2,000 $800 20 Client 58 1,000 200 10 Client 59 5,000 600 50 Bhavik's Accounting Services uses job costing and applies overhead using a normal costing system using professional labour hours as the allocation base. This period's estimated overhead cost is $400,000, estimated professional labour cost is $800,000 and estimated direct labour hours are 8,000. This period actual overhead cost was $426,400, actual direct labour cost was $820,000, and actual direct labour hours were 8,200 What is the total cost for Client 58? a) $1,300 b) $1,200 c) $1,720 d) $1,700 Answer: d