Question
Direct material (16,000 lb.) $ 80,000 Direct labor (@ $10/hr.) 200,000 Indirect material 12,000 Indirect labor 22,000 Sales commissions 34,000 Factory administration 16,000 Non factory
Direct material (16,000 lb.) $ 80,000
Direct labor (@ $10/hr.) 200,000
Indirect material 12,000
Indirect labor 22,000
Sales commissions 34,000
Factory administration 16,000
Non factory administrative expenses 20,000
Other manufacturing overhead* 80,000
*Provides for operating 40,000 machine hours.
a. Calculate the predetermined manufacturing overhead rate for the coming year for each of the following application bases: (1) direct labor hours, (2) direct labor costs, and (3) machine hours.
b. For each item in requirement a, determine the proper application of manufacturing overhead to Job 63, to which 16 direct labor hours, $150 of direct labor cost, and 40 machine hours have been charged.
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