Elliott Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company manufactures tools to customer specifications. The following data pertain to Job 1501:
| Direct materials used | $4,200 | |
| Direct labor-hours worked | 300 | |
| Direct labor rate per hour | $8.00 | |
| Machine-hours used | 200 | |
| Predetermined overhead rate per machine-hour.............. | $15.00 |
What is the total manufacturing cost recorded on Job 1501?
Solution:
| Direct materials used......................................................................... | $4,200 |
| Direct labor (300 hours × $8.00 per hour)............................................ | 2,400 |
| Manufacturing overhead applied (200 hours × $15.00 per hour).......... | 3,000 |
| Total manufacturing cost for job 1501................................................. | $9,600 |
