Solution of Problem 5-20
Cost Accounting
Part 1
Trophies Plaques Total
Direct materials
Forming $13,000 $11,250
Assembly 2,600 9,375
Total 15,600 20,625 $ 36,225
Direct Labor
Forming 15,600 9,000
Assembly 7,800 10,500
Total 23,400 19,500 42,900
Total direct costs $39,000 $40,125 $79,125
Budgeted overhead rate = ($12,000 $10,386 $23,000 $10,960) / $79,125
= $0.712114 per dollar of direct cost
Trophies Plaques Total
Direct materials $15,600 $20,625 $ 36,225
Direct labor 23,400 19,500 42,900
Total direct cost 39,000 40,125 79,125
Allocated overhead (Total direct cost * Budgeted overhead rate) 27,772 28,574 56,346
Total costs $66,772 $68,699 $135,471
