Doakes 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 M843 was completed with the following characteristics: The unit product cost for Job M843 is closest to:
A)$33.75
B)$67.50
C)$27.50
D)$50.50

Question

Doakes 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 M843 was completed with the following characteristics:  The unit product cost for Job M843 is closest to:
A)$33.75 
B)$67.50 
C)$27.50 
D)$50.50

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)= $378,000 + ($2.20 per direct labor-hour × 60,000 direct labor-hours)= $378,000 + $132,000 = $510,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $510,000 ÷ 60,000 direct labor-hours = $8.50 per direct labor-hour
Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $8.50 per direct labor-hour × 120 direct labor-hours = $1,020 11ea7998_5f5c_d29e_911b_83291da02be1_TB2627_00_TB2627_00 11ea7998_5f5c_f9af_911b_417545e6b74f_TB2627_00_TB2627_00

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