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 156,000
Fixed manufacturing overhead cost $652,000
Variable manufacturing overhead cost per machine hour $4.80

Answer 1

Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine hours. The fixed manufacturing overhead cost is $652,000 and the variable manufacturing overhead cost per machine hour is $4.80.

Step-by-step explanation:

This question is related to job-order costing in a manufacturing company. Moody Corporation uses a plantwide predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated 156,000 machine hours required to support production, with a fixed manufacturing overhead cost of $652,000 and a variable manufacturing overhead cost of $4.80 per machine hour. This information is used to calculate the overhead rate which is then applied to each job based on the actual machine hours used. The fixed overhead cost is allocated to each job based on the predetermined rate, while the variable overhead cost varies with the actual machine hours used.