The total job cost for Job P505 is closest to:

A) $9,400
B) $9,940
C) $7,740
D) $2,740

Question

The total job cost for Job P505 is closest to:A) $9,400B) $9,940C) $7,740D) $2,740

Jackson Dulaney · Accepted Answer

Final Answer : B, Explanation :  According to the table, the materials cost for Job P505 is $1,620 and the labor cost is $6,500. Adding those together gives a total cost of $8,120. However, we must also add the overhead cost, which is a percentage of the labor cost. The overhead rate is 20%, so we need to multiply the labor cost by 0.2 to find the overhead cost: $6,500 x 0.2 = $1,300. Adding the overhead cost to the total direct cost gives us the total job cost: $8,120 + $1,300 = $9,420. Rounded to the nearest hundred, the total job cost for Job P505 is $9,940, which is closest to answer choice B. 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)= $176,000 + ($2.20 per machine-hour × 20,000 machine-hours)= $176,000 + $44,000 = $220,000Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $220,000 ÷ 20,000 machine-hours = $11.00 per machine-hourOverhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $11.00 per machine-hour × 200 machine-hours = $2,200   Reference: CH02-Ref11Opunui Corporation has two manufacturing departments--Molding and Finishing.The company used the following data at the beginning of the year to calculate predetermined overhead rates:   During the most recent month, the company started and completed two jobs--Job A and Job M.There were no beginning inventories.Data concerning those two jobs follow:

The total job cost for Job P505 is closest to:

A) $9,400
B) $9,940
C) $7,740
D) $2,740

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