5. Peter Co. Makes shirts that it sells to retailers. The company uses a job order costing system in which predetermined overhead rates are used to apply factory overhead cost to jobs. The predetermined rate in the Sewing department is based on machine hours and in Cutting department is based on direct labor cost. The following estimates are made at the beginning of the year: Sewing Cutting Direct labor hours 24,000 120,000 Machine hours 140,000 10,000 Direct material cost 1,020,000 1,300,000 Direct labor cost 260,000 840,000 FOH Cost 1,204,000 1,470,000 Job 101 was started on February 1 and completed on February 25. The company’s cost records show the following information concerning the job. Sewing Cutting Direct labor hours 60 170 Machine hours 220 40 Material used 940 664 Direct labor cost 580 1,360 At the end of the year, the records of the company show the actual cost and data for all jobs worked during the year: Sewing Cutting Direct labor hours 20,000 124,000 Machine hours 130,000 18,000 Direct Material cost 860,000 1,360,000 Direct labor cost 216,000 872,000 FOH cost 1,140,000 1,500,000 Compute the factory overhead rate used in the Cutting Department during the year.
5. Peter Co. Makes shirts that it sells to retailers. The company uses a
Sewing Cutting
Direct labor hours 24,000 120,000
Machine hours 140,000 10,000
Direct material cost 1,020,000 1,300,000
Direct labor cost 260,000 840,000
FOH Cost 1,204,000 1,470,000
Job 101 was started on February 1 and completed on February 25. The company’s cost records show the following information concerning the job.
Sewing Cutting
Direct labor hours 60 170
Machine hours 220 40
Material used 940 664
Direct labor cost 580 1,360
At the end of the year, the records of the company show the actual cost and data for all jobs worked during the year:
Sewing Cutting
Direct labor hours 20,000 124,000
Machine hours 130,000 18,000
Direct Material cost 860,000 1,360,000
Direct labor cost 216,000 872,000
FOH cost 1,140,000 1,500,000
Compute the factory overhead rate used in the Cutting Department during the year.
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