Ch. 3 to 5
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Kelly Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given
that each construction job is different from the others, Susan Byrd, the company's accountant, decided to use a job-order costing
system to allocate costs to the different jobs. She decided to use construction labour hours as the basis for overhead allocation. In
December 2021, she estimated the following amounts for the year 2022:
Direct materials
$14,584,000
Construction labour
$10,500,000
Overhead
$ 8,800,000
Construction labour hours
500,000
es
Byrd recorded the following for the third quarter of 2022 for the three jobs that the company started and completed during the quarte
Direct materials
Construction labour hours
School
$864,000
66,200
Residential
$1,520,000
39,200
Cinema
$1,499,000
20,200
Required:
1. Compute the predetermined overhead allocation rate for 2022 and apply overhead to the three jobs. (Round your "Predetermined
overhead allocation rate" to 2 decimal places.)
Predetermined overhead allocation rate
$ 17.60 per DLH
Overhead
applied
