Exercise 29 JobOrder Costing and Decision Making LO21 LO22 L

Exercise 2-9 Job-Order Costing and Decision Making [LO2-1, LO2-2, LO2-3] 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 hours required to support estimated production Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour 225,000 $ 4,275,000 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 $3,700. The following information was available with respect to this job: Direct materials Direct labor cost Machine-hours used 1,702 $ 1,221 84 Compute the total manufacturing cost assigned to Job P90

Solution

1 Predetermined overhead rate = (4275000/225000)+2= $21 2 Direct materials 1702 Direct labor 1221 Overhead 1764 =84*21 Total manufacturing cost 4687