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	1,500,000
Direct labor used	260,000
Overhead	705,000
		2,387,000	Cost of goods manufactured
Ending	78,000

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 $31,000. How much direct labor cost and applied overhead are assigned to this job?

Determine the predetermined overhead rate used (based on direct materials cost).

Overhead Rate
Numerator:	/	Denominator:	=	Overhead Rate
	/		=	Overhead rate
	/		=

Only one job remains in work in process inventory at year-end. Its direct materials cost is $31,000. How much direct labor cost and applied overhead are assigned to this job?

Total cost of job in process
Direct labor cost