Characteristics of Production Process, Cost Measurement Vince Melders, of EcoScape Company, designs and installs custom...
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Accounting
Characteristics of Production Process, Cost Measurement
Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year:
Number of direct labor hours
6,540
Direct labor cost
$65,400
Overhead cost
$57,552
During the year, the following actual amounts were experienced:
Number of direct labor hours
6,055
Direct labor incurred
$66,605
Overhead incurred
$58,212.77
Required:
1. Should EcoScape use process costing or job-order costing?
2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor hours,
What is the overhead rate? Round your answer to the nearest cent.
$ per direct labor hour
What is the average actual wage rate?
$ per direct labor hour
What is the cost of an installation that takes $3,610 of direct materials and 20 direct labor hours?
$
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