Taveras Corporation is currently operating at 50% of its available manufacturing

Question

Taveras Corporation is currently operating at 50% of its available manufacturing capacity. It uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates Machine-hours required to support estimated production 265,000 Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour$ 2.00 $5,830,000 Required: 1. Compute the plantwide predetermined overhead rate. 2. During the year, Job P90 was started, completed, and sold to the customer for $4,500. The following information was available with respect to this job: Direct materials Direct labor cost Machine-hours used $2,070 $1,485 92 Compute the total manufacturing cost assigned to Job P90.

Explanation / Answer

1 Predetermined overhead rate = 2+(5830000/265000)= $24 2 Direct materials 2070 Direct labor 1485 Overhead applied 2208 =92*24 Total manufacturing cost 5763

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