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11 June, 08:40

Watson, Inc. applies overhead cost based on direct labor hours. In completing the 200 units in job #120, the company incurred $12,000 in direct materials and 500 direct labor hours at $18 per hour. The predetermined overhead rate is $6 per direct labor hour. What is the total cost of the units in job #120?

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  1. 11 June, 08:45
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    Total cost = $24,000

    Explanation:

    Giving the following information:

    Watson, Inc. applies overhead costs based on direct labor hours. In completing the 200 units in job #120, the company incurred $12,000 in direct materials and 500 direct labor hours at $18 per hour. The predetermined overhead rate is $6 per direct labor hour.

    Total cost = direct material + direct labor + manufacturing overhead

    Total cost = 12,000 + 500*18 + 6*500 = $24,000
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