Question

Lupo Corporation uses a job order costing system with a single plantwide predetermined overhead rate based on machine hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour 30,900 $154,500 $ 3.80 Recently, Job T687 was completed with the following characteristics Number of units in the job Total machine-hours Direct materials Direct labor cost 10 30 $ 740 $1,480 The amount of overhead applied to Job T687 is closest to

Answer 1

Working notes:
	CALCULATION OF RECOVERY RATE OF FIXED MANUFACTURING OVERHEAD
	Fixed manufacturing overhead = Total Fixed manufacturing overhead / Total Machine Hours
	Fixed manufacturing overhead = $ 154,500 / 30,900 = $ 5.00 Per Machine Hours
SOLUTION:
	CALCULATION OF TOTAL OVERHEAD APPLIED IN JOB NO. T687
	Variable Manufacturing overhead (30 Machine Hours X $ 3.00)	$                           90
	Fixed Manufacturing overhead (30 Machine Hours X $ 5.00)	$                        150
	Total	$                        240
	Answer = Total overhead of the Jon T 687 is closest to $ 240