Total cost of the job using direct labor?
ABC Corporation manufactured a new electronic part for Apples new cell phone. In particular, it manufactured 100,000 of these parts for Apples order. ABC wants to calculate the job cost and the cost per part.
For this particular job, direct materials were $250,000 and direct labor was $425,000. ABC used 20,000 direct labor hours and 50,000 machine hours.
Overhead must be allocated to this job. The estimated annual overhead is $4,200,000. ABC can allocate overhead based on direct labor hours or machine hours. The estimated annual direct labor hours are 60,000 and the estimated annual machine hours are 140,000.
Cost per part using direct labor hours
ABC Corporation manufactured a new electronic part for Apples new cell phone. In particular, it manufactured 100,000 of these parts for Apples order. ABC wants to calculate the job cost and the cost per part.
For this particular job, direct materials were $250,000 and direct labor was $425,000. ABC used 20,000 direct labor hours and 50,000 machine hours.
Overhead must be allocated to this job. The estimated annual overhead is $4,200,000. ABC can allocate overhead based on direct labor hours or machine hours. The estimated annual direct labor hours are 60,000 and the estimated annual machine hours are 140,000.
