Beta Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are:

The actual material and labor costs charged to Job #432 were as follows:

Beta applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental rates determined at the beginning of the year.
Proportion of manufacturing overhead with respect to the total cost of the job is ________.
A) 39.74%
B) 32.05%
C) 28.21%
D) 42.68%

Question

Beta Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are:

The actual material and labor costs charged to Job #432 were as follows:

Beta applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental rates determined at the beginning of the year.
Proportion of manufacturing overhead with respect to the total cost of the job is ________.
A) 39.74% 
B) 32.05% 
C) 28.21% 
D) 42.68%

Quizplus · Accepted Answer

DM $25,000 + DML $22,000 + MOH $31,000 [($10,000 × $500,000 / $200,000)] + [$12,000 × $450,000 / $900,000] = $78,000
$31,000 / $78,000 = 39.74%

Beta Corporation Uses a Job Cost System and Has Two