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 185,000 Fixed manufacturing overhead cost $2,960,000 Variable manufacturing overhead cost per machine-hour $ 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 $2,900. The following information was available with respect to this job. Direct materials Direct labor cost Machine-hours used $1,334 $ 957 76 Compute the total manufacturing cost assigned to Job P90 Complete this question by entering your answers in the tabs below.

Answer 1

1.

Variable manufacturing overhead rate per machine hour = $2

Total fixed manufacturing overhead costs = $2,960,000

Total machine hours = 185,000

Plant wide Predetermined overhead rate = Variable manufacturing overhead rate per machine hour + Total fixed manufacturing overhead costs/Total machine hours

= 2 + 2,960,000/185,000

= 2 + 16

= $18 per machine hour

2.

Machine hours used by job P90 = 76

Plant wide Predetermined overhead rate = $18 per machine hour

Overhead applied to job P90 = Machine hours used by job P90 x Plant wide Predetermined overhead rate

= 76 x 18

= $1,368

Job cost sheet (Job P90)

Direct materials	1,334
Direct labor	957
Overhead applied	1,368
Total manufacturing costs	$3,659

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