# G.A. Courtney & Sons build homes. Each home is considered a job; costs are accumulated by job to…

G.A. Courtney & Sons build homes. Each home is considered a job; costs are accumulated by job to determine the final cost of a home. The company builds two types of homes. Standard models are framed at factory using high-tech machinery and take little direct labor to complete. Custom homes are framed and finished at the building site using mostly direct labor and few machine hours. Annual estimates for each department follow:

Framing

Finishing

Total

\$400,000

\$167,600

\$567,600

DLH

9,700

41,900

51,600

MH

160,000

-0-

160,000

During the year, five jobs were started and completed. Jobs #101 and #103 were custom homes. The remaining jobs were standard models. Direct materials (DM), direct labor (DL), direct labor hours (DLH), and machine hours (MH) for each job follow:

DM

DL Framing

DLH Finishing

DLH Total

DLH

MH

Job #101

\$364,000

\$280,000

1,000

19,000

20,000

500

Job #102

90,000

100,000

2,800

500

3,300

46,500

Job #103

455,000

350,000

600

20,890

21,490

1,600

Job #104

144,000

160,000

2,100

800

2,900

52,000

Job #105

127,800

142,000

3,200

710

3,910

59,400

Total

\$1,180,800

\$1,032,000

9,700

41,900

51,600

160,000

REQUIRED:

(1)        Calculate the predetermined overhead rate (POR) using:

(a)        A single, plantwide cost pool and DLH as the application base.

(b)        Separate total overhead amounts for each department (one total for framing and one for finishing). Use MH as the application base for framing and DLH for finishing.