Lott company uses a job order cost system and applies overhead to production on the basis of direct labor costs. on january 1,2020, job 50 was the only job in process. the costs incurred prior to january 1 on this job were as follows: direct materials $21,000, direct labor $ 12,600, and manufacturing overhead $16,800. as of january 1, job 49 had been completed at a cost of $94,500 and was part of finished goods inventory. there was a $15,750 balance in the raw materials inventory account.

during the month of january, lott company began production on jobs 51 and 52,and completed jobs 50 and 51. jobs 49 and 50 were also sold on account during the month for $128,100 and $ 165,900, respectively. the following additional events occurred during the month.

1. purchased additional raw materials of $94,500 on account.

2. incurred factory labor costs of $73,500. of this amount $16,800 related to employer payroll taxes.

3. incurred manufacturing overhead costs as follows:

4. assigned direct materials and direct labor to job as follows.

job no. direct materials direct labor
50 $10,500 $5,250
51 40,950 26,250
52 31,500 21,000
calculate the predetermined overhead rate for 2020, assuming lott company estimates total manufacturing overhead costs of $ 882,000, direct labor costs of $735,000, and direct labor hours of 21,000 for the year.

predetermined overhead rate %

Estimated manufacturing overhead rate= $42 per direct labor hour.

Explanation:

Giving the following information:

Calculate the predetermined overhead rate for 2020, assuming Lott Company estimates total manufacturing overhead costs of $ 882,000, direct labor costs of $735,000, and direct labor hours of 21,000 for the year.

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

Estimated manufacturing overhead rate= 882,000/21,000= $42 per direct labor hour.

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know