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    Accounting:Overhead apportionment and Total product cost.

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    Veronica Company allocates overhead costs to jobs on the basis of direct labor hours. Its estimated average monthly factory costs for 2005 were as follows:

    Average Monthly Costs
    Direct material cost $60,000
    Direct labor cost 300,000
    Overhead cost 180,000

    Its estimated average monthly direct labor hours are 20,000. Among the jobs worked on in November 2005 were two jobs, G and H, for which the following information was collected:

    Job G Job H
    Direct material cost $10,000 $10,000
    Direct labor cost 28,000 32,000
    Direct labor hours 2,400 2,800


    a. Compute the overhead rate for Veronica Company.
    b. Compute the total production costs of jobs G and H.
    c. At what amounts would customers be billed if the company's practice was to charge 180 percent of the production of each job?

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    Solution Summary

    The problem deals with determining the amount of overheads apportioned to a product and the total cost of the products.