Figure 4-4 Erickson Company made the following predictions for 2011:
Job A2 (which was started and completed in May) used 3,000 direct labor hours, 2,000 machine hours, and $57,000 of prime costs.
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Refer to Figure 4-4.If factory overhead is applied based on machine hours, the cost of Job A2 for the Erickson Company is
A) $69,000.
B) $75,000.
C) $63,000.
D) $66,000.

Question

Figure 4-4 Erickson Company made the following predictions for 2011:
 Job A2 (which was started and completed in May) used 3,000 direct labor hours, 2,000 machine hours, and $57,000 of prime costs.
-
Refer to Figure 4-4.If factory overhead is applied based on machine hours, the cost of Job A2 for the Erickson Company is
A) $69,000. 
B) $75,000. 
C) $63,000. 
D) $66,000.

Quizplus · Accepted Answer

The cost of Job A2 is determined by adding the direct materials, direct labor, and applied factory overhead based on machine hours. The correct calculation results in a total cost of $63,000.

Figure 4-4 Erickson Company Made the Following Predictions for 2011