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 240,000
Fixed manufacturing overhead cost 4,320,000
Variable manufacturing overhead cost per machine-hour 2.00
Required:
1. Compute the plantwide predetermined overhead rate.
2. During the year, Job P90 was started, completed, and sold to the customer for $4,000. The following information was available with respect to this job:
Direct materials $1,840
Direct labor cost $1,320
Machine-hours used 87
Determine the total cost of Job P90