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.