Placker 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 $155,000, variable manufacturing overhead of $3.40 per machine-hour, and 50,000 machine-hours.Recently, Job A881 was completed with the following characteristics: The total job cost for Job A881 is closest to:
A)$3,595
B)$2,945
C)$2,950
D)$1,295

Question

Placker 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 $155,000, variable manufacturing overhead of $3.40 per machine-hour, and 50,000 machine-hours.Recently, Job A881 was completed with the following characteristics:  The total job cost for Job A881 is closest to:
A)$3,595 
B)$2,945 
C)$2,950 
D)$1,295

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)= $155,000 + ($3.40 per machine-hour × 50,000 machine-hours)= $155,000 + $170,000 = $325,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $325,000 ÷ 50,000 machine-hours = $6.50 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $6.50 per machine-hour × 100 machine-hours = $650 11ea7998_5f5d_95f1_911b_d1d77369d762_TB2627_00_TB2627_00

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