Lakeland Heating & Cooling installs and services commercial heating and cooling systems. Lakeland uses job costing to calculate the cost of its jobs. Overhead is allocated to each job based on the number of direct labour hours spent on that job. At the beginning of the cur- rent year, Lakeland estimated that its overhead for the coming year would be $60,000. It also anticipated using 4,000 direct labour hours for the year. In November, Lakeland started and completed the following two jobs:
Lakeland paid a $22 per hour wage rate to the employees who worked on these two jobs.
1. What is Lakeland’s predetermined overhead rate based on direct labour hours?
2. Calculate the overhead to be allocated based on direct labour hours to each of the two jobs.
3. What is the total cost of Job 101? What is the total cost of Job 102?

  • CreatedApril 30, 2015
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