Question

Taveras Corporation is currently operating at 50% of its available manufacturing capacity. It uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: Machine-hours required to support estimated production Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour 210,000 $ 3.360.000 $ 2.00 ebook Required: 1. Compute the plantwide predetermined overhead rate. 2. During the year, Job P90 was started, completed, and sold to the customer for $3,400. The following information was available with respect to this job: Direct materiale Direct labor cost Machine-hours used $ 1.564 $1. 122 Compute the total manufacturing cost assigned to Job P9o. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the plantwide predetermined overhead rate.

Answer 1

Answer

--All working forms part of the answer

A	Fixed Overheads	$3,360,000
B	machine hours	210000
C = A/B	Fixed Overhead per machine hours	$16
D	Variable overhead per machine hours	$2
E = C+D	Predetermined Overhead rate	$18	Answer: Requirement 1
F	Total machine hours for Job P90	81
G = E x F	Overhead allocated	$1,458
H	Direct material	$1,564
I	Direct labor cost	$1,122
J = G+H+I	Total manufacturing cost assigned to Job P90	$4,144	Answer: Requirement 2