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Peaton Computer Company uses a job order costing system in which each batch manufactured is a different job. Peaton Computer Company assigns direct materials and
Peaton Computer Company uses a job order costing system in which each batch manufactured is a different job. Peaton Computer Company assigns direct materials and direct labor to each job. The company assigns labor costs at $24 per hour. It allocates manufacturing overhead to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. At the beginning of 2024, the controller prepared the following budget: B (Click the icon to view the budget.) In November 2024, Peaton Computer Company worked on several jobs. Records for two jobs appear here: (Click the icon to view the records for the two jobs.) Read the requirements Requirement 1. Compute Pierpont Computer Company's predetermined overhead (OH) allocation rate for 2024. Estimated OH costs Estimated direct labor costs Predetermined OH allocation rate % $ Requirement 2. Compute the total cost of each job. Job 721 Job 722 Direct materials Direct labor Manufacturing overhead Total cost Requirement 3. Why does Pierpont assign costs to jobs? that cover all costs and Pierpont Computer Company assigns costs to jobs to help the company set sales prices contribute to profit. Assigning costs to individual jobs also can help Pierpont control costs. 0 x Data table Data table $ 113,000 Job 721 Job 722 790 hours 90 hours 21,500 $ 2,700 Manufacturing overhead Direct labor costs Direct labor hours Direct materials $ 1,130,000 $ Print Done Print Done
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