This problem continues the Piedmont Computer Company situation from Chapter 18. Piedmont Computer Company uses a job order costing system in which each batch manufactured is a different job. Piedmont Computer Company assigns direct materials and direct labor to each job. The company assigns labor costs at $25 per hour. It allocates manufacturing overhead to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs.

At the beginning of 2020, the controller prepared the following budget:

Manufacturing overhead	$  290,000
Direct labor costs	$ 1,160,000

In November 2020, Piedmont Computer Company worked on several jobs. Records for two jobs appear here:

	Job 721	Job 722
Direct labor hours	780 hours	60 hours
Direct materials	$ 23,400	$ 2,500

Requirements

1.  Compute Piedmont Computer Company’s predetermined overhead allocation rate for 2020.

2.  Compute the total cost of each job.

3.  Why does Piedmont assign costs to jobs?