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 260,000 Fixed manufacturing overhead cost $ 5,720,000 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 $4,400. The following information was available with respect to this job: Direct materials $ 2,024 Direct labor cost $ 1,452 Machine-hours used 91 Compute the total manufacturing cost assigned to Job P90.

Answer 1

Results are below.

Step-by-step explanation:

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= (5,720,000 / 260,000) + 2

Predetermined manufacturing overhead rate= $24 per machine hour

Now, we can determine the total cost of Job P90:

Total cost= 2,024 + 1,452 + (91*24)

Total cost= $5,660