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		32,700
Total fixed manufacturing overhead cost	$	294,300
Variable manufacturing overhead per machine-hour	$	2.00

Recently, Job T687 was completed with the following characteristics:

Number of units in the job		10
Total machine-hours		20
Direct materials	$	545
Direct labor cost	$	1,090

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

Multiple Choice

• $220.00

• $44.00

• $294.30

• $294.20

Answer 1

Correct answer---------$220

Working

Variable manufacturing overhead applied ($2 x 20)	$            40.00
Fixed manufacturing Overhead applied ($9 x 20)	$          180.00
Total overhead applied	$ 220.00

.

Total fixed manufacturing overhead cost	$ 294,300.00
Total machine-hours	32700
Overhead rate for fixed overhead	$               9.00