Job Costs Using a Plantwide Overhead Rate

Perrin Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $360,000, and budgeted direct labor hours were 24,000. The average wage rate for direct labor is expected to be $30 per hour. During June, Perrin Company worked on four jobs. Data relating to these four jobs follow:

	Job 39	Job 40	Job 41	Job 42
Beginning balance	$24,100	$35,400	$18,500	$500
Materials requisitioned	16,700	21,200	9,800	14,100
Direct labor cost	7,800	18,300	4,450	5,000

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 120 percent of cost. Job 40 is the only job in Finished Goods Inventory and will remain there until the customer accepts delivery and pays. Jobs 41 and 42 remain unfinished at the end of the month.

Required:

Question Content Area

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

fill in the blank dd434605bfd9f86_1 % of direct labor cost

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

Perrin Company Job-Order Cost Sheets blank

	Job 39	Job 40	Job 41	Job 42
Balance: June 1	$fill in the blank 6d2911f9efe800a_1	$fill in the blank 6d2911f9efe800a_2	$fill in the blank 6d2911f9efe800a_3	$fill in the blank 6d2911f9efe800a_4
Beginning balance, Work-In-ProcessCost of goods soldDirect materialsEnding balance, Work-in-ProcessMaterials handling	- Select -	- Select -	- Select -	- Select -
Beginning balance, Work-In-ProcessCost of goods soldDirect laborEnding balance, Work-in-ProcessMaterials handling	- Select -	- Select -	- Select -	- Select -
Applied overheadBeginning balance, Work-In-ProcessCost of goods soldEnding balance, Work-in-ProcessMaterials handling	- Select -	- Select -	- Select -	- Select -
Total	$fill in the blank 6d2911f9efe800a_20	$fill in the blank 6d2911f9efe800a_21	$fill in the blank 6d2911f9efe800a_22	$fill in the blank 6d2911f9efe800a_23

Question Content Area

3. What if the expected direct labor rate at the beginning of the year was $24 instead of $30? What would the overhead rate be? If required, round your overhead rate answer to one decimal place.

New budgeted direct labor cost = $fill in the blank ccb81a033fe6029_1

New overhead rate = fill in the blank ccb81a033fe6029_2% of direct labor cost