Question
Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 57,500 direct
Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 57,500 direct labor-hours would be required for the periods estimated level of client service. The company also estimated $345,000 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firms actual overhead cost for the year was $365,300 and its actual total direct labor was 64,000 hours.
1. Compute the predetermined overhead rate.
2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available with respect to this job:
Direct materials | $ 38,700 |
---|---|
Direct labor cost | $ 26,400 |
Direct labor-hours worked | 230 |
Compute the total job cost for the Xavier Company engagement.
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