Hahn Company uses a job-order costing system. Its plantwide predetermined overhead rate uses direct labor-hours as the allocation base. The company pays its direct laborers $15.50 per hour. During the year, the company started and completed only two jobs—Job Alpha, which used 64,400 direct labor-hours, and Job Omega. The job cost sheets for the these two jobs are shown below: Job Alpha Direct materials ? Direct labor ? Manufacturing overhead applied ? Total job cost $ 1,790,000 Job Omega Direct materials $ 276,950 Direct labor 401,450 Manufacturing overhead applied 220,150 Total job cost $ 898,550 Required: 1. Calculate the plantwide predetermined overhead rate. 2. Complete the job cost sheet for Job Alpha.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Hahn Company uses a job-order costing system. Its plantwide predetermined overhead rate uses direct labor-hours as the allocation base. The company pays its direct laborers $15.50 per hour. During the year, the company started and completed only two jobs—Job Alpha, which used 64,400 direct labor-hours, and Job Omega. The
| Job Alpha | ||
| Direct materials | ? | |
| Direct labor | ? | |
| Manufacturing overhead applied | ? | |
| Total job cost | $ | 1,790,000 |
| Job Omega | ||
| Direct materials | $ | 276,950 |
| Direct labor | 401,450 | |
| Manufacturing overhead applied | 220,150 | |
| Total job cost | $ | 898,550 |
Required:
1. Calculate the plantwide predetermined overhead rate.
2. Complete the job cost sheet for Job Alpha.
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