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23 August, 05:03

Tektron Industries applies overhead on the basis of 200% of direct labor cost. Job No. 275 is charged with $30,000 of direct materials costs and $40,000 of manufacturing overhead. What are the total manufacturing costs for Job No. 275

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  1. 23 August, 08:40
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    Total cost = $150,000

    Explanation:

    Giving the following information:

    Tektron Industries applies overhead on the basis of 200% of direct labor cost. Job No. 275 is charged with $30,000 of direct materials costs and $40,000 of manufacturing overhead.

    First, we need to calculate the allocated overhead:

    Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

    Allocated MOH = 2*40,000 = $80,000

    Now, we can calculate the total job cost:

    Total cost = direct material + direct labor 'allocated overhead

    Total cost = 30,000 + 40,000 + 80,000 = $150,000
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