Decorte 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 K332 was completed with the following characteristics:
The unit product cost for Job K332 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $94.10
B) $18.10
C) $82.50
D) $47.05

Question

Decorte 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 K332 was completed with the following characteristics:
 The unit product cost for Job K332 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $94.10 
B) $18.10 
C) $82.50 
D) $47.05

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) = $33,000 + ($2.50 per direct labor-hour × 10,000 direct labor-hours) = $33,000 + $25,000 = $58,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $58,000 ÷ 10,000 direct labor-hours = $5.80 per direct labor-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $5.80 per direct labor-hour × 140 direct labor-hours = $812
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Decorte Corporation Uses a Job-Order Costing System with a Single