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: Recently, Job T687 was completed with the following characteristics:
The estimated total manufacturing overhead is closest to:
A) $315,000
B) $252,000
C) $252,002
D) $63,000

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:  Recently, Job T687 was completed with the following characteristics:
 The estimated total manufacturing overhead is closest to:
A) $315,000 
B) $252,000 
C) $252,002 
D) $63,000

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) = $252,000 + ($2.10 per machine-hour × 30,000 machine-hours) = $252,000 + $63,000 = $315,000

Lupo Corporation Uses a Job-Order Costing System with a Single