Question

Session 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 30,400
Total fixed manufacturing overhead cost $ 425,600
Variable manufacturing overhead per machine-hour $ 5
Recently, Job T687 was completed with the following characteristics:

Number of units in the job 10
Total machine-hours 20
Direct materials $ 590
Direct labor cost $ 1,180
The total job cost for Job T687 is closest to .............. .

(Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer:

$2,150

Explanation:

Total variable overhead estimated:

= Variable manufacturing overhead per machine-hour × Total machine-hours

= $5 × 30,400

= $152,000

Total overhead estimated:

= Total variable overhead estimated + Total fixed manufacturing overhead cost

= $152,000 + $ 425,600

= $577,600

Predetermined overhead rate:

= Total overhead estimated ÷ Total machine-hours

= $577,600 ÷ 30,400

= $19 per machine hour

Total overhead applied:

= Predetermined overhead rate × Total machine-hours

= $19 per machine hour × 20

= $380

Total job cost:

= Direct material + Direct labor + Total overhead

= $590 + $1,180 + $380

= $2,150