Highland, Inc., an engineering firm, uses a job order costing system to accumulate client−related costs. The predetermined overhead allocation rate is 50% of staff labor cost. The work by engineers is charged to jobs at a rate of $33 per staff labor hour. A recent job for a client used 80 staff labor hours. How much was the total job cost?

A.$1,320

B.$40

C.$2,640

D.$3,960

$1,320 was the total job cost, And so , correct option is A.$1,320.

Explanation:

Here we have , Highland, Inc., an engineering firm, uses a job order costing system to accumulate client−related costs. The predetermined overhead allocation rate is 50% of staff labor cost. The work by engineers is charged to jobs at a rate of $33 per staff labor hour. A recent job for a client used 80 staff labor hours. Let's calculate job cost for 80 staff labor hours at a rate of $33 per staff labor hour :

⇒

and

⇒

⇒

⇒

But , it's given that  The predetermined overhead allocation rate is 50% of staff labor cost. ∴ Total cost = 50% of 2640

⇒ Total cost =

⇒ Total cost =

Hence, $1,320 was the total job cost, And so , correct option is A.$1,320.

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