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

Question

Lily Cisneros

Business

8 November, 02:58

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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Answers (1)

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Osvaldo Krause · Answer 1

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