Lupo Corporation uses a job-order costing system with a single plantwide predete

Question

Lupo 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 the following data: Total machine-hours 30,500 Total fixed manufacturing overhead cost $ 610,000 Variable manufacturing overhead per machine-hour $ 6 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $ 690 Direct labor cost $ 1,370 The unit product cost for Job T687 is closest to:

$147.00

$94.67

$206.00

$284.00

Explanation / Answer

Plantwide predetermined overhead rate = 6+(610000/30500)= $26 Direct materials 690 Direct labor cost 1370 Overhead applied 780 =30*26 Total cost 2840 Divided by Total units 10 Unit product cost 284 Option 4 $284.00 is correct

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