Petru 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-hours70,000?Total fixed manufacturing overhead cost$525,000?Variable manufacturing overhead per machine-hour$2.30Recently Job P987 was completed with the following characteristics:?Number of units in the job20?Total machine-hours80?Direct materials$630?Direct labor cost$2,080Required:Calculate the unit product cost for Job P987.
What will be an ideal response?
Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $525,000 + ($2.30 per machine-hour × 70,000 machine-hours) = $525,000 + $161,000 = $686,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $686,000 ÷ 70,000 machine-hours = $9.80 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.80 per machine-hour × 80 machine-hours = $784
| ? | Direct materials | $630 |
| ? | Direct labor | 2,080 |
| ? | Manufacturing overhead applied | 784 |
| ? | Total cost of Job P987 | $3,494 |
| ? | Total cost of Job P987 (a) | $3,494 |
| ? | Number of units (b) | 20 |
| ? | Unit product cost (a) ÷ (b) | $174.70 |
You might also like to view...
The following are human relations principles that convey appropriate tone to customers:
A) use I-centered phrasing to be sure they understand you. B) talk to people as groups, not as individuals to avoid offending. C) express ideas in ways that convey "what's in it for me" to customers. D) be aggressive in phrasing in order to convey the importance of your message.
The experience of the decision maker in specific business settings can be used as a criterion for establishing goal priorities
a. True b. False
A frequently used approximation for the yield to maturity on a long-term bond is the
A) coupon rate. B) current yield. C) cash flow interest rate. D) real interest rate.
?The job of increasing public awareness of a company's products, brands, or activities and by fostering desirable company images, such as innovativeness, dependability, or social responsibility is the task of
A. ?public relations. B. ?publicity. C. ?press releases. D. ?notoriety.