Exercise 19-17 (Algo) Overhead rate; costs assigned to jobs LO P3

Shire Companys predetermined overhead rate is based on direct labor cost. Management estimates the company will incur $672,000 of overhead costs and $560,000 of direct labor cost for the period. During March, Shire began and completed Job 56.

1. What is the predetermined overhead rate for this period? 2. Use the information on the following job cost sheet to determine the total cost of Job 56.

Lorenzo Company applies overhead to jobs on the basis of direct materials cost. At year-end, the Work in Process Inventory account shows the following.

Work in Process Inventory
Debit		Credit
Beginning	0
Direct materials used	1,900,000
Direct labor used	280,000
Overhead	760,000
		2,863,000	Cost of goods manufactured
Ending	77,000

1. Determine the predetermined overhead rate used (based on direct materials cost). 2. Only one job remains in work in process inventory at year-end. Its direct materials cost is $24,000. How much direct labor cost and applied overhead are assigned to this job?