Problem
a) B&B Fabricating uses a job order cost system. Overhead is applied to jobs on the basis of direct labour hours. During the current period, Job No. 105 was charged $400 in direct material, $450 in direct labour, and $180 in overhead. If direct labor cost is an average of $15 per hour, calculate the company's overhead application rate?
b) Overhead is applied to jobs at a rate of 150% of direct labor costs. Job # 100 required $500 in direct labor costs. The job was initially budgeted to require $550 in direct labor costs.
Calculate the overhead applied to job # 100 during the period?