Dellroy Restaurant Supply manufactures commercial stoves and ovens for restaurants
Dellroy Restaurant Supply manufactures commercial stoves and ovens for restaurants and bakeries. Dellroy uses job costing to calculate the costs of its jobs with direct labour cost as its manufacturing overhead allocation base. At the beginning of the current year, Dellroy estimated that its overhead for the coming year would be $300,000. It also anticipated using 25,000 direct labour hours for the year. Dellroy pays its employees an average of $20 per direct labour hour. Dellroy just finished Job 371, which consisted of two large ovens for a regional bakery. The costs for Job 371 were as follows:
Job 371
Direct materials used............................................................................. $13,000
Direct labour hours used....................................................................... 110
Requirements
1. What is Dellroy’s predetermined manufacturing overhead rate based on direct labour cost?
2. Calculate the manufacturing overhead to be allocated based on direct labour cost to Job
371.
3. What is the total cost of Job 371?
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