Problem 2-18 Job-Order Costing for a Service Company (LO2-1, LO2-2, LO2-3] Speedy Auto Repairs uses a...

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Problem 2-18 Job-Order Costing for a Service Company (LO2-1, LO2-2, LO2-3] Speedy Auto Repairs uses a job-order costing system. The company's direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics' hourly wages. Speedy's overhead costs include various items, such as the shop manager's salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. The company applies all of its overhead costs to jobs based on direct labor-hours. At the beginning of the year, it made the following estimates: Direct labor-hours required to support estimated output Fixed overhead cost Variable overhead cost per direct labor-hour 18,000 $ 198,000 $ 1.00 Required: 1. Compute the predetermined overhead rate. 2. During the year, Mr. Wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. The following information was available with respect to his job: Direct materials Direct labor cost Direct labor-hours used $ 719 $ 177 Compute Mr. Wilkes' total job cost. 3. If Speedy establishes its selling prices using a markup percentage of 30% of its total job cost, then how much would it have charged Mr. Wilkes? Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Compute the predetermined overhead rate. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH Problem 2-18 Job-Order Costing for a Service Company (LO2-1, LO2-2, LO2-3] Speedy Auto Repairs uses a job-order costing system. The company's direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics' hourly wages. Speedy's overhead costs include various items, such as the shop manager's salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. The company applies all of its overhead costs to jobs based on direct labor-hours. At the beginning of the year, it made the following estimates: Direct labor-hours required to support estimated output Fixed overhead cost Variable overhead cost per direct labor-hour 18,000 $ 198,000 $ 1.00 Required: 1. Compute the predetermined overhead rate. 2. During the year, Mr. Wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. The following information was available with respect to his job: $ 719 Direct materials Direct labor cost Direct labor-hours used $ 177 7 Compute Mr. Wilkes' total job cost. 3. If Speedy establishes its selling prices using a markup percentage of 30% of its total job cost, then how much would it have charged Mr. Wilkes? Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Compute Mr. Wilkes' total job cost. (Round your intermediate calculations to 2 decimal places.) Direct materials Direct labor Overhead applied Total cost assigned to Mr. Wilkes Problem 2-18 Job-Order Costing for a Service Company (L02-1, LO2-2, LO2-3] Speedy Auto Repairs uses a job-order costing system. The company's direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics' hourly wages. Speedy's overhead costs include various items, such as the shop manager's salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. The company applies all of its overhead costs to jobs based on direct labor-hours. At the beginning of the year, it made the following estimates: Direct labor-hours required to support estimated output Fixed overhead cost Variable overhead cost per direct labor-hour 18,000 $ 198,000 $ 1.00 Required: 1. Compute the predetermined overhead rate. 2. During the year, Mr. Wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. The following information was available with respect to his job: Direct materials Direct labor cost Direct labor-hours used $ 719 $ 177 7 Compute Mr. Wilkes' totaljob cost. 3. If Speedy establishes its selling prices using a markup percentage of 30% of its total job cost, then how much would it have charged Mr. Wilkes? Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 If Speedy establishes its selling prices using a markup percentage of 30% of its total job cost, then how much would it have charged Mr. Wilkes? (Round your intermediate calculations to 2 decimal places.). Amount charged to Mr. Wikes

 · Answer

Requirement 1

A	Fixed Overheads	$198,000
B	DLHs	18000
C = A/B	Fixed Overhead per machine hours	$11.00
D	Variable overhead per machine hours	$1.00
E = C+D	Predetermined Overhead rate	$12.00	*Answer: Requirement 1*

Requirement 2


Direct material	$719
Direct labor cost	$177
Overhead allocated [ 7 DLHs x $ 12]	$84
Total manufacturing cost assigned	$980	*Answer: Requirement 2*

Requirement 3

Amount charged to Mr Wikes = $ 980 + 30% = $ 1274

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Problem 2-18 Job-Order Costing for a Service Company (LO2-1, LO2-2, LO2-3] Speedy Auto Repairs uses a...

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