Allocating Manufacturing Overhead to Jobs

Webber Fabricating estimated the following annual hours and costs:

Expected annual direct labor hours 40,000

Expected annual direct labor cost 625,000

Expected machine hours 20,000

Expected material cost for the year 800,000

Expected manufacturing overhead $1,000,000

Required

a. Calculate predetermined overhead allocation rates using each of the four possible allocation bases provided.

b. Determine the cost of the following job (number 253) using each of the four overhead allocation rates:

Job 253

Direct materials	$3,000
Direct labor (150 hrs @ $12/hr)	$1,800
Machine hours used	150
Indirect materials	$40,000
Indirect labor	80,000
Utilities	25,000
Depreciation	60,000
Repair expense	55,000
Total	$260,000

Required

a. Prepare a journal entry to record overhead applied to jobs.

b. Prepare a journal entry to record actual overhead.