Determine Mad-Fly estimated predetermined overhead rate

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Problem - Job Order Costing for a Service Business - The Mad-Fly Agency provides consulting services to a variety of clients across the country. The agency accumulates costs for each consulting project on the basis of direct labor costs and allocated overhead costs. Mad-Fly's estimated direct labor and overhead costs for the year are as follows:

Direct labor hours (professional staff) 20,000 hours

Hourly rate for professional staff $180 per hour

Estimated total overhead costs $1,200,000

Mad-Fly allocates overhead costs to individual jobs based on the total estimated direct labor hours of its professional services staff.

Required -

a. Determine Mad-Fly's estimated predetermined overhead rate for the year.

b. Mad-Fly started and completed a consulting job for MT Industries during the year (Job 402). The job required 200 direct labor hours of professional staff. Determine the cost of the MT Industries job (Job 402).

Reference no: EM132759591

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