Question

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:

Machine-hours required to support estimated production		205,000
Fixed manufacturing overhead cost	$	3,075,000
Variable manufacturing overhead cost per machine-hour	$	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 $3,300. The following information was available with respect to this job:

Direct materials	$	1,518
Direct labor cost	$	1,089
Machine-hours used		80

Compute the total manufacturing cost assigned to Job P90.

Answer 1