Opunui 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:
Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job M is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $10,830
B) $7,400
C) $25,730
D) $7,500

Question

Opunui 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:
 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job M is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $10,830 
B) $7,400 
C) $25,730 
D) $7,500

Quizplus · Accepted Answer

First, we need to calculate the plantwide predetermined overhead rate:

Predetermined overhead rate = Estimated total manufacturing overhead cost / Estimated total machine-hours
Predetermined overhead rate = ($183,200 + $43,800) / 4,500 = $45.07 per machine-hour

Next, we can use this rate to allocate overhead costs to each job:

Job A:
Direct materials = $4,500
Direct labor = $1,600
Manufacturing overhead = $45.07 × 200 machine-hours
Manufacturing overhead = $9,014
Total manufacturing cost = $15,114

Job M:
Direct materials = $3,200
Direct labor = $2,100
Manufacturing overhead = $45.07 × 280 machine-hours
Manufacturing overhead = $12,619.60
Total manufacturing cost = $17,919.60

Therefore, the total manufacturing cost assigned to Job M is $17,919.60, which is closest to option C ($25,730).

Opunui Corporation Has Two Manufacturing Departments--Molding and Finishing