Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead for the year was $760,000 and estimated direct labor hours were 20,000. What would be recorded as the cost of job WR53?

D. $730

Explanation:

From checks, the complete question is as shown below:

Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead for the years was $760,000 and estimated direct labor hours were 20,000. What would be recorded as the cost of job WR53?

A. $200

B. $350

C. $380

D. $730

The total cost of the job is the sum of the direct and indirect(overhead) costs. The direct cost includes the cost of material and direct labor.

The overheads given is a function of the direct labor hours. For a unit of Job WR53 at NW Fab,

Direct material cost = $200

Direct labor cost = $15 × 10 = $150

Given that the total overheads for the year based on estimated direct labor hours of 20,000 is $760,000

The overheads per hour

= $760,000/20,000

= $38

Given that 10 direct labor hours are needed,

Overhead cost = $38 × 10

= $380

Total cost of the job

= $200 + $150 + $380

= $730

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