Ask Question
23 May, 09:36

Neptune Accounting Services expects its accountants to work 26,000 direct labor hours per year. The company's estimated total indirect costs are $239,000. The direct labor rate is $75 per hour. The company uses direct labor hours as the allocation base for indirect costs.

If Neptune performs a job requiring 20 hours of direct labor, what is the total job cost?

A. $1,500

B. $184

C. $239,000

D. $1,684

+2
Answers (1)
  1. 23 May, 13:09
    0
    The correct answer is D.

    Explanation:

    Giving the following information:

    Neptune Accounting Services expects its accountants to work 26,000 direct labor hours per year. The company's estimated total indirect costs are $239,000. The direct labor rate is $75 per hour. The company uses direct labor hours as the allocation base for indirect costs.

    Neptune performs a job requiring 20 hours of direct labor.

    First, we need to calculate the overhead rate:

    Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

    Estimated manufacturing overhead rate = 239,000/26,000 = $9.19 per direct labor hour.

    Total cost = 75*20 + 20*9.19 = $1,684
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Neptune Accounting Services expects its accountants to work 26,000 direct labor hours per year. The company's estimated total indirect ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers