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Question(s) / Instruction(s):

A company uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. The predetermined overhead rates for the year are 200% for Department A and 50% for Department B. Job 123, started and completed during the year, were charged with the following costs:

                                                Dept. A Dept. B

Direct materials                                $25,000 $5,000

Direct labor                                         ?              $30,000

Manufacturing overhead             $40,000 ?

The total manufacturing costs associated with Job 123 should be:

 a)           $135,000

 b)           $180,000

 c)           $195,000

 d)           $240,000

 

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