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 32,600 Total fixed manufacturing overhead cost $ 195,600 Variable manufacturing overhead per machine-hour $ 4 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $ 550 Direct labor cost $ 1,100

Explanation / Answer

Predetermine overhead rate = (195600/32600)+4 = 10 per machine hour

Direct material 550 Direct labour 1100 Overhead (30*10) 300 Total product cost 1950 Units 10 Product cost per unit 195

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