Russo Cabinets Is a Custom Cabinet Builder

question 79

Essay

Russo Cabinets is a custom cabinet builder.They recently completed a set of kitchen cabinets (Job Number 1887),as summarized below:
Russo applies overhead to jobs at a rate of $18 per direct labor hour.
a.How much overhead would be applied to Job #1887?
b.What is the total cost of Job #1887?

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Definitions:

Products

Goods or services that are created through a business process and offered in the market to satisfy the needs or wants of customers.

Predetermined Overhead Rate

This is a rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to products.

Machine-Hours

A measure of the amount of time machinery is in operation, commonly used as a basis for allocating machine related costs to products.

Manufacturing Overhead

All indirect costs associated with the production process, including equipment maintenance, utilities, and factory management salaries.