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 165,000 $ 1,980,000 $ 2.00 Required: 1. Compute the plantwide predetermined overhead rate. 2. During the year, Job P90 was started, completed, and sold to the customer for $2,500. The following information was available with respect to this job: Direct materials Direct labor cost Machine-hours used $ 1,150 $ 830 72 Compute the total manufacturing cost assigned to Job P90. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the plantwide predetermined overhead rate. Predetermined overhead rate per MH | < Required 1 Required 2 >

Answer 1

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Taveras Corporation
Answer 1
Calculation of Predetermined OH Rate	Amount $	Note
Fixed Manufacturing overhead	1,980,000.00	A
Machine Hours	165,000.00	B
Predetermined OH Rate	12.00	C=A/B
Answer 1 b
Allocated OH for JobP90	Amount $
Machine Hours used	72.00	D
Predetermined OH Rate	12.00	See C
Allocated Fixed Manufacturing OH	864.00	E=C*D
Machine Hours used	72.00	D
Variable Manufacturing OH Rate	2.00	F
Variable Manufacturing OH	144.00	G=F*D
Total Manufacturing OH	1,008.00	H=E+G
Manufacturing cost assigned to JobP90	Amount $
Direct Materials	1,150.00
Direct Labor	830.00
Overhead applied	1,008.00	See H
Manufacturing cost	2,988.00	N=K+I+J