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		32,000
Total fixed manufacturing overhead cost	$	352,000
Variable manufacturing overhead per machine-hour	$	3.00

Recently, Job T687 was completed with the following characteristics:

Number of units in the job		10
Total machine-hours		40
Direct materials	$	675
Direct labor cost	$	1,350

The amount of overhead applied to Job T687 is closest to:

Answer 1

Statement of Overhead - JOB T687
Particulars	Calculations	Amount
Fixed Overhead applied to job	352000*40/32000	$ 440.00
Variable Overhead	3*40	$ 120.00
Total Overhead		$ 560.00
Statement of Total Cost - JOB T687
Particulars	Amount
Direct Material	$             675.00
Direct Labour	$          1,350.00
Variable Overhead	$             120.00
Fixed Overhead	$             440.00
Total Cost	$        2,585.00