Actual costs and Normal Costs
Ohio river company uses a predermines rate for applying overhead to producation using normal costing. The Rates for this year 1 follow: variable, 200 percent of direct labor dollars; fixed 300 percent of direct labor dollars. Actual overhead costs incurred follow: variable, $20,000; fixed, $26,000. Actual direct materials cost were $5,000 and actual labor costs were $9,000. Ohio river produced one job in year 1.
(a.) Calculate actual costs of the job
(b) Calculate normal costs of the job using predetermined overhead rates.
