Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs On January 1

Question

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 20 200 direct labor 12 120 and manufacturing overhead 16 160 As of January 1 Job 49 had been completed at a cost of 90 900 and was part of finished goods inventory There was a 15 150 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 123 220 and 159 580 respectively The following additional events occurred during the month Purchased additional raw materials of 90 900 on account Incurred factory labor costs of 70 700 Of this amount 16 160 related to employer payroll taxes Incurred manufacturing overhead costs as follows indirect materials 17 170 indirect labor 20 200 depreciation expense on equipment 12 120 and various other manufacturing overhead costs on account 16 160 4 Assigned direct materials and direct labor to jobs as follows 1 2 3 Job No Direct Materials 50 51 52 10 100 39 390 30 300 Direct Labor 5 050 25 250 20 200 Calculate the predetermined overhead rate for 2020 assuming Lott Company estimates total manufacturing overhead costs of S848 400 direct labor costs of 707 000 and direct labor hours of 20 200 for the year

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