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		30,700
Total fixed manufacturing overhead cost	$	337,700
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		20
Direct materials	$	575
Direct labor cost	$	1,150

The unit product cost for Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.)

Garrison 16e Rechecks 2017-06-28

Multiple Choice

$202.50

$172.50

$101.25

Answer 1

Formula sheet

A	B	C	D	E	F	G	H	I	J
2
3		Total machine-hours	30700
4		Total fixed manufacturing overhead cost	337700
5		Variable manufacturing overhead per machine-hour	4
6		Total manufacturing Overhead	=D4+D5*D3	=D4+D5*D3
7
8		Predetermined overhead rate	=Total Estimated Manufacturing Overhead/Total estimated machine hours
9			=D6/D3	=D6/D3
10
11		Job T687 has following details:
12		Number of units in the job	10
13		Total machine-hours	20
14		Direct materials	575
15		Direct labor cost	1150
16
17		Cost of Job T687 can be calculated as follows:
18		Direct materials	575
19		Direct labor cost	1150
20		Applied Manufacturing Overhead	=D13*D9	=D13*D9
21		Total cost of job T687	=SUM(D18:D20)	=SUM(D18:D20)
22		Number of units in the job	=D12
23		Cost per unit	=D21/D22	=D21/D22
24
25		Hence cost per unit is	=D23
26