Predetermined overhead application rate


Neil Company uses a job order cost system and has established a predetermined overhead application rate for the current year of 150%, based on budgeted overhead of $900,000 and budgeted direct labor cost of $600,000. Job no. 1 was charged with direct materials of $20,000 and with overhead of $18,000. The total cost of job no. 1:

a. Is $38,000.

b. Is $50,000.

c. Is $65,000.

d. Cannot be determined without additional information.

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Accounting Basics: Predetermined overhead application rate
Reference No:- TGS094341

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