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Chapter 2 Example- Determining the Cost of a Job Job 203 consists of producing 2 chairs. . Total direct material costs incurred on Job 203

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Chapter 2 Example- Determining the Cost of a Job Job 203 consists of producing 2 chairs. . Total direct material costs incurred on Job 203 is $60 Job 203 required 4 direct labor hours at S20 per hour . Job 203 required 6 machine hours Consider the following three independent cases. 1. Determine the cost of Job 203 assuming that direct labor hours is the allocation base where the firm expected to incur $600,000 of fixed M-OH and S4 of variable M-OH costs per direct labor hour and the firm expected to use 100,000 direct labor hours. 2. Determine the cost of Job 203 assuming that direct labor costs is the allocation base where the firm expected to incur $400,000 of fixed M-OH and variable M-OH costs of 200% of direct labor costs and the firm expected to incur $800,000 of direct labor costs Determine the cost of Job 203 assuming that machine hours is the allocation base where the firm expected to incur $1,000,000 of fixed M-OH and S10 of variable M-OH costs per machine hour hour and the firm expected to use 200,000 machine hours. 3

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