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	$23,700	$35,300	$16,200	$1,800
Materials requisitioned	19,400	21,200	8,400	13,400
Direct labor cost	10,500	18,300	3,050	4,300

Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 115 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:

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

fill in the blank 399fc7fd0fa906f_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
	Job 39	Job 40	Job 41	Job 42
Balance: June 1	$fill in the blank ae47ff06604f010_1	$fill in the blank ae47ff06604f010_2	$fill in the blank ae47ff06604f010_3	$fill in the blank ae47ff06604f010_4
Direct materials	fill in the blank ae47ff06604f010_6	fill in the blank ae47ff06604f010_7	fill in the blank ae47ff06604f010_8	fill in the blank ae47ff06604f010_9
Direct labor	fill in the blank ae47ff06604f010_11	fill in the blank ae47ff06604f010_12	fill in the blank ae47ff06604f010_13	fill in the blank ae47ff06604f010_14
Applied overhead	fill in the blank ae47ff06604f010_16	fill in the blank ae47ff06604f010_17	fill in the blank ae47ff06604f010_18	fill in the blank ae47ff06604f010_19
Total	$fill in the blank ae47ff06604f010_20	$fill in the blank ae47ff06604f010_21	$fill in the blank ae47ff06604f010_22	$fill in the blank ae47ff06604f010_23

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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 67092e08907bf9b_1

New overhead rate = fill in the blank 67092e08907bf9b_2% of direct labor cost

How would the cost of the jobs be affected?

Applied overhead would increase