Levron 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 $58,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed: The predetermined overhead rate is closest to:
A) $2.90 per machine-hour
B) $2.00 per machine-hour
C) $4.90 per machine-hour
D) $6.90 per machine-hour

Question

Levron 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 $58,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed:  The predetermined overhead rate is closest to:
A) $2.90 per machine-hour 
B) $2.00 per machine-hour 
C) $4.90 per machine-hour 
D) $6.90 per machine-hour

Quizplus · Accepted Answer

The Answer of Levron 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 $58,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed:  The predetermined overhead rate is closest to:
A) $2.90 per machine-hour 
B) $2.00 per machine-hour 
C) $4.90 per machine-hour 
D) $6.90 per machine-hour

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