Chapter 19, Problem S19.13SE

To determine

Determination of Cost under Job-order costing:

The Cost to be charged for the jobs shall be determined on the basis of actual cost incurred on direct material used on the jobs computed on the basis of material requisition sheet and actual cost of labour hours worked on a specific job which can be determined on the labour card prepared for the respective job.

However, the manufacturing overheads which is indirect cost not directly related to respective job shall be charged to jobs on the actual activity undertaken for the job on pre-determined overhead rate basis. The activity base needs to be decided by management for use (which may be labour hours, machine hours, labour cost, etc).

Requirement1:

The hourly wage rate of Sawyer.

To determine

Requirement2:

The Total labour cost charged to Client 507.