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23 January, 19:17

A marketing consultant uses the job costing system and has a pre-determined overhead rate of $15 per direct labor hour. This amount is based on an estimated overhead of $30,000 and an average time of 5.0 hours per job. Job #521 incurred direct material costs of $50 and 6 direct labor hours costing of $75 per hour. The total cost of job #521 is_.

A. $155.

B. $215.

C. $565.

D. $590

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  1. 23 January, 19:34
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    D. $590

    Explanation:

    Predetermined overhead rate = $15 per labour hour

    Direct Material cost = $50

    Labor rate = $75 per hour

    Number of Direct labor hour = 6

    Direct labor cost = 6 x 75 = $450

    Overhead applied cost = Predetermined overhead rate x Direct labor hours

    Overhead applied cost = 15 x 6 = $90

    Total cost = $50 + $450 + $90

    Total cost = $590

    So, the correct answer is D. $590
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