Business, 10.03.2020 04:50 AutumnJoy12

Peterson Heating & Cooling installs and services commercial heating and cooling systems. Peterson uses job costing to calculate the cost of its jobs. Overhead is allocated to each job based on the number of direct labor hours spent on that job. At the beginning of the current year, Peterson estimated that its overhead for the coming year would be $63,750. It also anticipated using 4,250 direct labor hours for the year. In October, Peterson started and completed the following two jobs:

Job 101 Job 102
Direct materials used $17,000 $13,000
Direct labor hours used 175 74
Peterson paid a $28 per-hour wage rate to the employees who worked on these two jobs.

Determine the formula to calculate Peterson's predetermined overhead rate based on direct labor hours, then calculate the rate.

Answers: 2

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Peterson Heating & Cooling installs and services commercial heating and cooling systems. Peterso...