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 185,000Fixed manufacturing overhead cost $ 2,960,000Variable 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 $ 1,334Direct labor cost $ 957Machine-hours used 76 Compute the total manufacturing cost assigned to Job P90.

Answer 1

1. plantwide predetermined overhead rate is $18

2. manufacturing cost assigned to Job P90 is $3659

Step-by-step explanation:

1. To calculate the predertimend overhead rate based on machine hours of use, we have to dividide de fixed overhead cost over the machine hours to support estimated production and then add the variable overhead cost per machine hour.

$2,960,000/185,000 hours. + $2= $18 per hour.

2. Manufactoring cost of Job P90 is:

Direct materials $1,334

Direct Labor cost $957

Overhead 76 machine hours * 18=$1,368

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Total cost $3,659