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 30,000 Total fixed manufacturing overhead cost $ 252,000 Variable manufacturing overhead per machine-hour $ 2.10 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $ 675 Direct labor cost $ 1,050 The total job cost for Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer:

Total cost= $2,040

Explanation:

Giving the following information:

Total machine-hours 30,000

Total fixed manufacturing overhead cost $ 252,000

Variable manufacturing overhead per machine-hour $ 2.10

Job T687:

Total machine-hours 30

Direct materials $675

Direct labor cost $1,050

First, we need to calculate the estimated overhead rate:

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

Estimated manufacturing overhead rate= (252,000/30,000) +2.1= $10.5 per machine-hour

Now, we can calculate the total cost of Job T687:

Total cost= direct material + direct labor + allocated overhead

Total cost= 675 + 1,050 + (10.5*30)= $2,040