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16 October, 19:43

If overhead is applied to individual jobs at a rate of 60% of direct labor costs incurred per job, and $40,000 in materials were used and $15,000 of direct labor was required - what was the overhead costs charged to the job?

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  1. 16 October, 20:07
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    Overhead charged = $9,000

    Explanation:

    Overhead cost = 60% x $15,000

    =$9,000

    Hence, the overhead costs charged to the job = $9,000.

    Overhead costs refer to those expenses associated with running a business that can't be linked directly to a particular product or service.

    Hence, this is always apportioned to different products and services using a fair basis that represents how the costs have been consumed or utilized.
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