Fill in the Blank QuestionFill in the blank question.The Production Department incurs costs of $250,000 while working 12,500 direct labor hours. If Job 421 requires 25 direct labor hours to assemble, the amount of overhead allocated to the job will be $.
Question
Fill in the Blank QuestionFill in the blank question.The Production Department incurs costs of .
Solution
To calculate the overhead allocated to the job, we first need to determine the overhead rate. This is done by dividing the total costs by the total direct labor hours.
Step 1: Calculate the overhead rate Overhead rate = Total costs / Total direct labor hours Overhead rate = 20 per hour
Step 2: Calculate the overhead allocated to the job Overhead allocated = Overhead rate * Direct labor hours for the job Overhead allocated = 500
So, the amount of overhead allocated to Job 421 will be $500.
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