Question

Moody Corporation 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 152,000 Fixed manufacturing overhead cost $ 660,000 Variable manufacturing overhead cost per machine-hour $ 4.80 Required: 1. Compute the plantwide predetermined overhead rate. 2. During the year, Job 400 was started and completed. The following information was available with respect to this job: Direct materials $ 370 Direct labor cost $ 250 Machine-hours used 38

Answer 1

$9.14 per machine hour

Step-by-step explanation:

Fixed predetermine overhead rate:

= Fixed manufacturing overhead cost ÷ Machine hours required to support estimated production

= 660,000 ÷ 152,000

= 4.34 per machine hour

Variable predetermine overhead rate = $ 4.80 per machine hour

Total predetermine overhead rate:

= Fixed predetermine overhead rate + Variable predetermine overhead rate

= ($4.34 + $ 4.80)

= $9.14 per machine hour