Question

LupoCorporationusesajob-ordercostingsystemwithasingleplantwidepredetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $252,000 Variable manufacturing overhead per machine-hour $2.10 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $ 675 Direct labor cost $ 1,050 What's the unit cost of this job?

1. A $99.00

2. B $68.00

3. C $172.50

4. D $204.00

Answer 1

Unit Cost of Job :-

Direct Material ($675/10 unit)	$67.5
Direct Labor cost ($1050/10 units)	$105
Manufacturing Overhead ($10.50 * 30 hours)/10 units	$31.50
Unit cost of Job	$204

Predetermined OH rate = (Estimated Fixed OH/Estimated Machine hours) + Variable OH per machine hours

= ($252000/30000) + $2.10 = $10.50

Option D is correct