Question

Taveras Corporation is currently operating at 50% of its available manufacturing capacity. It uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:

Machine-hours required to support estimated production		165,000
Fixed manufacturing overhead cost	$	1,980,000
Variable manufacturing overhead cost per machine-hour	$	2.00

Required:

1. Compute the plantwide predetermined overhead rate.

2. During the year, Job P90 was started, completed, and sold to the customer for $2,500. The following information was available with respect to this job:

Direct materials	$	1,150
Direct labor cost	$	830
Machine-hours used		72

Compute the total manufacturing cost assigned to Job P90.

1. what is the predetermined overhead rate?

2. what are the direct materials, direct labor, operational overhead, and total manufacturing cost

Answer 1

Solution :

The total manufacturing cost assigned to Job P90 = $ 2,988

1. The predetermined overhead rate = $ 14

2. For Job P90 direct materials = $ 1,150 ;   direct labor = $ 830 ;   operational overhead = $ 1,008   and total manufacturing cost = $ 2,988

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.