Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: The total job cost for Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $2,660
B) $3,104
C) $3,604
D) $1,444

Question

Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed:  The total job cost for Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $2,660 
B) $3,104 
C) $3,604 
D) $1,444

Quizplus · Accepted Answer

First, we need to calculate the total overhead cost:
Total overhead cost = Total fixed manufacturing overhead cost + Total variable manufacturing overhead cost
Total variable manufacturing overhead cost = Variable manufacturing overhead rate x Machine hours used
Total variable manufacturing overhead cost = $3.90 x 12,000 machine hours
Total variable manufacturing overhead cost = $46,800
Total overhead cost = $237,000 + $46,800
Total overhead cost = $283,800

Next, we can calculate the total cost of Job A496:
Total cost = Direct materials cost + Direct labor cost + Manufacturing overhead cost
Total cost = $900 + $650 + ($283,800 / 30,000 machine hours x 1,200 machine hours used)
Total cost = $900 + $650 + $9,540
Total cost = $11,090

Therefore, the total job cost for Job A496 is closest to $3,604 (answer choice C).

Kostelnik Corporation Uses a Job-Order Costing System with a Single