Asked by Banaz Fetah on Jul 03, 2024
Verified
Placker 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 total fixed manufacturing overhead cost of $155,000, variable manufacturing overhead of $3.40 per machine-hour, and 50,000 machine-hours.Recently, Job A881 was completed with the following characteristics: The total job cost for Job A881 is closest to:
A) $3,595
B) $2,945
C) $2,950
D) $1,295
Plantwide Predetermined Overhead
An overhead rate calculated for an entire manufacturing plant, applied to all products regardless of the specific department in which they were produced.
Machine-Hours
A measure of production activity that quantifies the number of hours machines are operated in the manufacturing process.
- Determine the complete financial expenditure of a job, taking into account the costs of direct materials, direct labor, and applied overhead expenses.
Verified Answer
BA
Bright AsareJul 09, 2024
Final Answer :
A
Explanation :
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)= $155,000 + ($3.40 per machine-hour × 50,000 machine-hours)= $155,000 + $170,000 = $325,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $325,000 ÷ 50,000 machine-hours = $6.50 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $6.50 per machine-hour × 100 machine-hours = $650
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $325,000 ÷ 50,000 machine-hours = $6.50 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $6.50 per machine-hour × 100 machine-hours = $650
Learning Objectives
- Determine the complete financial expenditure of a job, taking into account the costs of direct materials, direct labor, and applied overhead expenses.
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