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View Full Version : Managerial Accounting


rmuner
Feb 11, 2012, 06:19 AM
Builder Bug Company allocates manufacturing overhead at $9 per direct labor hour. Job A45 required 5 boxes of direct materials at a cost of $30 per box and took employees 14 hours to complete. Employees earn $15 per hour.
Compute the total cost of JOb A45.

pready
Feb 11, 2012, 12:25 PM
This is pretty simple to figure out. You have three (3) costs to compute:
1. Overhead
2. Direct Materials
3. Direct Labor

For Overhead simply take your $9 rate per direct Labor hour times 14 direct labor hours.

For Direct Materials simply take 5 boxes of direct materials times $30 a box.

For Direct Labor simply take the number of hours to complete, which was 14 hours times the direct labor cost of $15 per hour.

After you compute all three costs you just simply add the costs together to get the total cost for the job.