Kostelnik 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 total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: The total job cost for Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $2,660
B) $3,104
C) $3,604
D) $1,444

Question

Kostelnik 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 total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed:  The total job cost for Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $2,660 
B) $3,104 
C) $3,604 
D) $1,444

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) = $237,000 + ($3.90 per machine-hour × 30,000 machine-hours) = $237,000 + $117,000 = $354,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $354,000 ÷ 30,000 machine-hours = $11.80 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.80 per machine-hour × 80 machine-hours = $944
 11eacbfc_c725_77b9_8ffe_ebe712618a19_TB7552_00

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