If overhead is applied to individual jobs at a rate of 60% of direct labor costs incurred per job, and $40,000 in materials were used and $15,000 of direct labor was required - what was the overhead costs charged to the job?

Question

Business

Scott Horton

22 July, 06:47

If overhead is applied to individual jobs at a rate of 60% of direct labor costs incurred per job, and $40,000 in materials were used and $15,000 of direct labor was required - what was the overhead costs charged to the job?

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Answers (1)

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Prince Bowman · Answer 1

Overhead charged = $9,000

Explanation:

Overhead cost = 60% x $15,000

=$9,000

Hence, the overhead costs charged to the job = $9,000.

Overhead costs refer to those expenses associated with running a business that can't be linked directly to a particular product or service.

Hence, this is always apportioned to different products and services using a fair basis that represents how the costs have been consumed or utilized.