Missing details in the 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 165,000
Fixed manufacturing overhead cost $1,980,000
Variable manufacturing overhead cost per machine-hour $2.00
Answer:
1. Predetermined Overhead Rate = $14 per machine-hour
2. Total Manufacturing Cost =$1056
3.
Explanation:
1. Calculating the plantwide predetermined overhead rate.
First, we need to calculate the estimated total overhead
This is calculated using the following formula
E = F + VM
Where F =
M = Machine-hours = 165,000
F = Fixed manufacturing overhead cost = $1,980,000
V = Variable manufacturing overhead cost per machine-hour = $2.00
By Substituton;
E = $1,980,000 + $2.00 * 165,000
E = $1,980,000 + $330,000
E = $2,310,000
The Predetermined Overhead Rate, P = E/M
By Substitution
P =$2,310,000/165,000
P = $14 per machine-hour
Hence, the Predetermined Overhead Rate is $14 per machine-hour
2. Calculating the total manufacturing cost assigned to Job 400
3. If Job 400 includes 60 units, the unit product cost for this job is $17.6 per unit
Given
Direct materials $ 320
Direct labor cost $ 260
Machine-hours used 34
First, we need to calculate the overhead applied.
Overhead Applied = Machine-hour used * Overhead Rate
Overhead Applied = 34 * 14
Overhead Applied = $476
Total Manufacturing Cost = Direct materials + Direct labor cost + Overhead Applied.
Total Manufacturing Cost = $320 + $260 + $476
Total Manufacturing Cost =$1056
3. If Job 400 includes 60 units, the unit product cost for this job is calculated by
Total Manufacturing Cost ÷Total units for production
= $1056/60
= $17.6 per unit
Answer:
(A) The plant wide predetermined overhead allocation rate cannot be calculated because the question is incomplete.
(B) Total Manufacturing Cost = $9,160
(C) Product Cost per Unit = $152.67
Explanation:
(A) Predetermined Overhead Rate = Total overhead cost ÷ Total machine hours
Input the data on Total Overhead Cost and calculate (as the data is absent in the question here)
Only machine hours is given.
(B) Total Manufacturing Cost = Direct Materials Cost + Direct Labour Cost + Manufacturing Overhead Cost
Since manufacturing overhead is absent, Total Manufacturing Cost is equal to
$320 + ($260 × 34hrs) = $320 + $8,840 = $9,160
(C) Product Cost per Unit = $9,160 ÷ 60 units
Product Cost per Unit = $152.67
