Exercise 2-7 (Algo) Job-Order Costing; Working Backwards [LO2-1, LO2-2, LO2-3] 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 $22.00 per hour. During the year, the company started and completed only two jobs-Job Alpha, which used 58,700 direct labor-hours, and Job Omega. The job cost sheets for these two jobs are shown below: Job Alpha Direct materials Direct labor Manufacturing overhead applied Total job cost Job Onega Direct materials Direct labor Manufacturing overhead applied Total job cost $2,590,000 $ 448,700 574,200 391,500 $ 1,414,400 Required 1. Calculate the plantwide predetermined overhead rate. 2. Complete the job cost sheet for Job Alpha, A
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
![Exercise 2-7 (Algo) Job-Order Costing: Working Backwards [LO2-1, LO2-2, LO2-3]
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 $22.00 per hour. During the year, the company started and completed only two jobs-Job
Alpha, which used 58,700 direct labor-hours, and Job Omega. The job cost sheets for these two jobs are shown below:
Job Alpha
Direct materials
Direct labor
Manufacturing overhead applied
Total job cost
Job Omega
Direct materials
Direct labor
Manufacturing overhead applied.
Total job cost
?
?
2
$ 2,590,000
$ 448,700
574,200
391,500
$1,414,400
Required
1. Calculate the plantwide predetermined overhead rate.
2. Complete the job cost sheet for Job Alpha
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Calculate the plantwide predetermined overhead rate. (Round vour answer to 2 decimal places.)
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