Yancey Productions is a film studio that uses joborder costing. The companys direct materials include costumes and props. Its direct labor includes each films actors, directors, and extras. The companys overhead costs include items such as utilities, depreciation of equipment, senior management salaries, and wages of maintenance workers. Yancey applies its overhead cost to films based on direct labordollars.
At the beginning of the year, Yancey made the following estimates:
Direct labordollars to support all productions $
Fixed overhead cost $
Variable overhead cost per direct labordollar $
Required:
Compute the predetermined overhead rate.
During the year, Yancey produced a film titled You Can Say That Again that incurred the following costs:
Direct materials $
Direct labor cost $
