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 32,000 Total fixed manufacturing overhead cost $ 352,000 Variable manufacturing overhead per machine-hour $ 3.00 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 40 Direct materials $ 675 Direct labor cost $ 1,350 The total job cost for Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer

• Predetermined overhead rate = ($352000 / 32000 hours) + $ 3 variable oh rate
  = 11 + 3
  = $ 14.00 per MHs
• Total Job Cost for Job T687 = $ 675 material + $ 1350 labor cost + (40 MHs x $ 14)
  = 675 + 1350 + 560
  = $ 2,585 Answer