Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given that each construction job is different from the others, Susan Byrd, the company's accountant, decided to use a job - order costing system to allocate costs to the different jobs. She decided to use construction labo - hours as the basis for overhead allocation. In December 2021, she estimated the following amounts for the year 2022: Direct materials $ 14, 560,000 Construction labour S 10, 200,000 Overhead $ 7,900,000 Construction labour - hours 500,000 Byrd recorded th following for the second quarter of 2022 for the three jobs that the company started and completed during the quarter. School Residential Cinema Direct materials $ 824,000 $ 1,034, 600 $ 1,425,000 Construction labour - hours 66, 400 37,200 18,500 Required: 1. Compute the predetermined overhead allocation rate for 2022 and apply overhead to the three jobs. (Round your "Predetermined overhead allocation rate" to 2 decimal places.) 2. Compute the cost of each job. (Do not round intermediate calculations.)
Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given that each construction job is different from the others, Susan Byrd, the company's accountant, decided to use a job - order costing system to allocate costs to the different jobs. She decided to use construction labo - hours as the basis for overhead allocation. In December 2021, she estimated the following amounts for the year 2022: Direct materials $ 14, 560,000 Construction labour S 10, 200,000 Overhead $ 7,900,000 Construction labour - hours 500,000 Byrd recorded th following for the second quarter of 2022 for the three jobs that the company started and completed during the quarter. School Residential Cinema Direct materials $ 824,000 $ 1,034, 600 $ 1,425,000 Construction labour - hours 66, 400 37,200 18,500 Required: 1. Compute the predetermined overhead allocation rate for 2022 and apply overhead to the three jobs. (Round your "Predetermined overhead allocation rate" to 2 decimal places.) 2. Compute the cost of each job. (Do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Case Construction Company, a three-year-old business, provides contracting and
construction services to a variety of clients. Given that each construction job is different
from the others, Susan Byrd, the company's accountant, decided to use a job - order
costing system to allocate costs to the different jobs. She decided to use construction labour
- hours as the basis for overhead allocation. In December 2021, she estimated the
following amounts for the year 2022: Direct materials $ 14,560,000 Construction labour $
10, 200,000 Overhead $ 7,900,000 Construction labour - hours 500,000 Byrd recorded the
following for the second quarter of 2022 for the three jobs that the company started and
completed during the quarter. School Residential Cinema Direct materials $ 824, 000 $
1,034,600 $ 1,425,000 Construction labour - hours 66,400 37,200 18,500 Required: 1.
Compute the predetermined overhead allocation rate for 2022 and apply overhead to the
three jobs. (Round your "Predetermined overhead allocation rate" to 2 decimal places.) 2.
Compute the cost of each job. (Do not round intermediate calculations.)
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