Beans 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 total fixed manufacturing overhead cost of $162,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 60,000 direct labor-hours. Recently, Job K818 was completed with the following characteristics: The total job cost for Job K818 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $1,675
B) $2,595
C) $1,195
D) $2,320

Question

Beans 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 total fixed manufacturing overhead cost of $162,000, variable manufacturing overhead of $2.80 per direct labor-hour, and 60,000 direct labor-hours. Recently, Job K818 was completed with the following characteristics:  The total job cost for Job K818 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $1,675 
B) $2,595 
C) $1,195 
D) $2,320

Quizplus · Accepted Answer

To calculate the total job cost, we need to find the amount of direct materials, direct labor, and overhead expenses for Job K818.

Direct materials cost = $1,200
Direct labor cost = 10 hours x $15/hour = $150
Overhead cost = predetermined overhead rate x direct labor-hours
= $3.02/hour x 10 hours = $30.20

Therefore, the total job cost for Job K818 is:

$1,200 (direct materials) + $150 (direct labor) + $30.20 (overhead) = $1,380.20.

Round this answer to the nearest dollar to get $1,380.

Therefore, the closest total job cost for Job K818 is $2,595 (choice B).

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