The Orville Haberman Company, a small manufacturer, uses a job costing system to measure and track product costs for its line of specialty outdoor clothing and uses normal costing to allocate overhead costs to its products. For the coming year, Kristin George, Haberman’s controller, estimates total overhead costs to be $100,000. Production manager Portia Kabler told Kristin that her best estimate for total production time for the year is 20,000 hours. Production data for the first quarter of the year is shown below:

Required
A. Calculate Haberman’s predetermined overhead rate based on direct labor hours.
B. Calculate the overhead cost to be assigned to parkas, shirts, pants, and shoes.
C. Calculate the total manufacturing cost of parkas, shirts, pants, and shoes.
D. Based on your knowledge of costing systems described in the chapter, which other method(s) might Haberman consider to measure and track the cost of its products? Why would the company choose to continue using job costing as it currentlydoes?

Transcribed Image Text:

Parkas 16,000 13,000 1,500 Shirts 12,000 10,000 1,250 Shoes $11,500 9,500 950 Pants Direct materials used Direct labor cost Direct labor hours $9,500 7,000 850