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 Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour 31,400 $219,800 4 Recently. Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours Direct materials Direct labor cost $ 580 $1,160 to 2 decimal places) The total job cost for Job T687 is closest to: (Round your intermediate calculation

Explanation / Answer

Pre-determined overhead rate = Total fixed overhead cost / Total machine-hours = $219800 / 31400 MHs = $7 per MH

Total cost for Job T687 is:

Direct Material $580 Direct Labor costs 1160 Overhead Costs : Fixed overhead (20 * $7per MH) 140 Variable overhead (20 * $4 per MH) 80    Total Job Costs = $1960  

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