1. Perrin Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $300,000, and budgeted direct labor hours were 20,000. 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	$23,200	$35,000	$16,500	$1,400
   Materials requisitioned	20,500	21,800	9,200	13,600
   Direct labor cost	11,600	18,900	3,850	4,500

   Overhead is assigned as a percentage of direct labor cost. During June, Jobs 39 and 40 were completed; Job 39 was sold at 110 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 1f055ef6504704b_1 % of direct labor cost

   Question Content Area

   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 485b56003053f8b_1	$fill in the blank 485b56003053f8b_2	$fill in the blank 485b56003053f8b_3	$fill in the blank 485b56003053f8b_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 485b56003053f8b_20	$fill in the blank 485b56003053f8b_21	$fill in the blank 485b56003053f8b_22	$fill in the blank 485b56003053f8b_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 bd86d0f44feb068_1

   New overhead rate = fill in the blank bd86d0f44feb068_2% of direct labor cost

   How would the cost of the jobs be affected?

   Applied overhead would increaseApplied overhead would decreaseApplied overhead would not change

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