Job 731 was recently completed. The following data have been recorded on its job cost sheet:
$$\begin{array} { ll }
\text { Direct materials } & \$ 2,391 \
\text { Direct labor-hours } & 69 \text { labor-hours } \
\text { Direct labor wage rate } & \$ 13 \text {per labor-hour } \
\text { Machine-hours } & 129 \text { machine-hours }
\end{array}$$
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 731 would be:
A) $3,288.
B) $5,094.
C) $4,254.
D) $2,418.

Question

Job 731 was recently completed. The following data have been recorded on its job cost sheet:
$$\begin{array} { ll } 
\text { Direct materials } & \$  2,391 \
\text { Direct labor-hours } &  69 \text { labor-hours } \
\text { Direct labor wage rate } & \$  13 \text {per  labor-hour } \
\text { Machine-hours } & 129 \text { machine-hours }
\end{array}$$
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 731 would be:
A) $3,288.
B) $5,094.
C) $4,254.
D) $2,418.

Quizplus · Accepted Answer

The total cost includes direct materials, direct labor, and applied overhead. Direct labor cost is 69 hours * $13/hour = $897. Applied overhead is 129 machine-hours * $14/machine-hour = $1,806. Total cost = $2,391 (materials) + $897 (labor) + $1,806 (overhead) = $5,094.

Job 731 Was Recently Completed The Company Applies Manufacturing Overhead on the Basis of Machine-Hours