Characteristics of Production Process, Cost Measurement

Vince Kim, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year:

Number of direct labor hours	6,660
Direct labor cost	$79,920
Overhead cost	$55,944

During the year, the following actual amounts were experienced:

Number of direct labor hours	6,180
Direct labor incurred	$80,340
Overhead incurred	$56,349.24

Required:

1. Should EcoScape use process costing or job-order costing?

Job-order costingProcess costing

2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor hours,

What is the overhead rate? Round your answer to the nearest cent.

$fill in the blank 2 per direct labor hour

What is the average actual wage rate?

$fill in the blank 3 per direct labor hour

What is the cost of an installation that takes $3,580 of direct materials and 10 direct labor hours?

$fill in the blank 4