Budgeted overhead for the year was $455,000, and budgeted direct labor hours were 26,000. The average wage rate for direct labor is expected to be $35 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow:

	Job 39	Job 40	Job 41	Job 42
Beginning balance	$25,500	$33,900	$18,300	$200
Materials requisitioned	18,200	20,000	8,600	13,400
Direct labor cost	9,300	17,100	3,250	4,300

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 115 percent of cost. (Naranjo had originally developed Job 40 to order for a customer; however, that customer was near bankruptcy and the chance of Naranjo being paid was growing dimmer. Naranjo decided to hold Job 40 in inventory while the customer worked out its financial difficulties. Job 40 is the only job in Finished Goods Inventory.) Jobs 41 and 42 remain unfinished at the end of the month.

1. Calculate the overhead rate based on direct labor cost.

------- % of direct labor cost

2. Set up a simple job-order cost sheet for all jobs in process during June.

Naranjo Company Job-Order Cost Sheets

	job 39	job40	job41	job42
Balance June 1
Direct materials
Direct labor
applied overhead
total

3. What if the expected direct labor rate at the beginning of the year was $28 instead of $35? What would the overhead rate be? If required, round your overhead rate answer to one decimal place.

New budgeted direct labor cost =----

New overhead rate = ---- % of direct labor cost