Question

i need help with the process of finding the right answer for this practice problem can someone help?

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 31,500 $220, 500 $ 6.00 Recently. Job T687 was completed with the following characteristics Number of units in the job Total machine-hours Direct materials Direct labor cost The total job cost for Job T687 is closest to

Answer 1

Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $220,500 + ($6.00 per machine-hour × 31,500 machine-hours) = $220,500 + $189,000 = $409,500

Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $409,500 ÷ 31,500 machine-hours = $13 per machine-hour

Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred bythe job = $13 per machine-hour × 40 machine-hours = $520

Total cost of Job T687 = Direct materials + Direct labor + Manufacturing overhead applied

Total cost of Job T687 = $685 + $1,370 + $520

Total cost of Job T687 = $2,575