Taveras Corporation is currently operating at 50 of its av c

Taveras Corporation is currently operating at 50% of its av capacity. It uses a job-order costing system with a predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: 228,000 cost $ 3,960,8e0 2.00 the ad rate 2. During the year, Job P90 was started, completed, and sold to the customer for $3,600. The following information was available with respect to this job: 83 Prex 80, 13

Solution

Answer 1.

Estimated Manufacturing Overhead Cost = Fixed Manufacturing Overhead Cost + Variable Manufacturing Overhead Cost * Machine-hours required to support estimated production
Estimated Manufacturing Overhead Cost = $3,960,000 + $2.00 * 220,000
Estimated Manufacturing Overhead Cost = $4,400,000

Plantwide Predetermined Overhead Rate = Estimated Manufacturing Overhead Cost / Machine-hours required to support estimated production
Plantwide Predetermined Overhead Rate = $4,400,000 / 220,000
Plantwide Predetermined Overhead Rate = $20.00

Plantwide Predetermined Overhead Rate is $20.00 per machine-hour

Answer 2.

Direct Materials Cost = $1,656
Direct Labor Cost = $1,188
Number of Machine-hours used = 83

Manufacturing Overhead Cost = Number of Machine-hours used * Plantwide Predetermined Overhead Rate
Manufacturing Overhead Cost = 83 * $20.00
Manufacturing Overhead Cost = $1,660

Total Manufacturing Cost = Direct Materials Cost + Direct Labor Cost + Manufacturing Overhead Cost
Total Manufacturing Cost = $1,656 + $1,188 + $1,660
Total Manufacturing Cost = $4,504