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Trenton worked on four jobs during its first year of operation: nos. 401, 402, 403, and 404. A
review of job no. 403's cost record revealed direct material charges of $40,000 and total
manufacturing costs of $50,000. If Trenton applies overhead at 150% of direct labor cost, the
overhead applied to job no. 403 must have been:

A. $0.
B. $6,000.
C. $4,000.
D. $3,333.
E. $5,000.



Answer :

To find the overhead applied to job no. 403, subtract direct material charges from total manufacturing costs to get direct labor cost.

Then, apply overhead at 150% of the direct labor cost to find the total overhead applied.

The overhead applied to job no. 403:

  1. Calculate the direct labor cost: $50,000 - $40,000 = $10,000.
  2. Apply overhead at 150% of direct labor cost: 150% of $10,000 = $15,000.
  3. Therefore, the overhead applied to job no. 403 is $15,000.

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