Question
***ALL QUESTIONS AND PARTS OF QUESTIONS MUST BE ANSWERED. IF YOU ARE UNABLE TO ANSWER ALL NECESSARY ITEMS, PLEASE DO NOT RESPOND. THANK YOU. Assume
***ALL QUESTIONS AND PARTS OF QUESTIONS MUST BE ANSWERED. IF YOU ARE UNABLE TO ANSWER ALL NECESSARY ITEMS, PLEASE DO NOT RESPOND. THANK YOU.
Assume the Mariposa Corporation uses a job-order costing system with a single plant wide 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 corporation has provided the following data concerning Job M which was recently completed:
Number of units in the job | 20 |
Total machine-hours | 80 |
Direct materials | $ 500 |
Direct labor cost | $ 2,160 |
Question a) Provide a definition for job-order costing systems, and explain why a manager would decide to use a job-order costing system, rather than a process costing system to determine the cost of the product or service.
Question b) Provide the formula that is used for the predetermined overhead rate to calculate the dollar amount of manufacturing overhead applied to a job, and then explain how managers use this information to determine the cost of a product. Enter your final answer to this particular item in the space below this sentence.
Question c) What is the total cost of Job M? NOTE: You are required to show all supporting details used to determine an answer which includes the account titles and dollar amount for each account that was used in the calculations to answer this question.
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