9 Levron Corporation uses a job-order costing system with a single plantwide pre

Question

9 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 unber of units in the ob Total machine-hours Direct materials Direct labor cost 20 80 $ 500 $2,640 The predetermined overhead rate is closest to: Multiple Choice $2 90 per machine-hour $200 per machine-hour $4.90 per machine-hour $6.90 per machine-hour

Explanation / Answer

Ans)Option C $4.9 per MH

The estimated total manufacturing overhead cost is computed as follows:

Y = $58000 + $2.00 per MH × 20,000 MHs

Estimated fixed manufacturing overhead.......................... $58000

Estimated variable manufacturing overhead $2 MH X 20000 = 40,000

Estimated total manufacturing overhead cost.................... 98,000

The predetermined overhead rate is computed as follows:

Estimated total manufacturing overhead................$98000

÷ Estimated total machine-hours (MHs)..................20,000MHs

= Predetermined overhead rate..............................4.9 per MH

Related Questions

Navigate

• Browse (All)
• Browse 9
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.