Doakes Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Recently, Job M843 was completed with the following characteristics:
The unit product cost for Job M843 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $33.75
B) $67.50
C) $27.50
D) $50.50

Question

Doakes Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data:  Recently, Job M843 was completed with the following characteristics:
 The unit product cost for Job M843 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $33.75 
B) $67.50 
C) $27.50 
D) $50.50

Quizplus · Accepted Answer

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) = $378,000 + ($2.20 per direct labor-hour × 60,000 direct labor-hours) = $378,000 + $132,000 = $510,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $510,000 ÷ 60,000 direct labor-hours = $8.50 per direct labor-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.50 per direct labor-hour × 120 direct labor-hours = $1,020
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Doakes Corporation Uses a Job-Order Costing System with a Single