Allocating Manufacturing Overhead to Jobs
Webber Fabricating estimated the following annual costs.
|
Expected annual direct labor hours |
40,000 |
|
Expected annual direct labor cost |
625,000 |
|
Expected machine hours |
20,000 |
|
Expected material cost for the year |
800,000 |
|
Expected manufacturing overhead |
1,000,000 |
Required
a. Calculate overhead allocation rates using each of the four possible allocation bases provided.
b. Determine the cost of the following job (number 253) using each of the four overhead allocation rates. Job 253 Direct materials $3,000 Direct labor (150 hrs @ $12/hr)