Exercise 2-9 (Algo) Job-Order Costing and Decision Making [LO2-1, LO2-2, LO2-3]

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	220,000
Fixed manufacturing overhead cost	$ 3,960,000
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 $3,600. The following information was available with respect to this job:

Direct materials	$ 1,656
Direct labor cost	$ 1,188
Machine-hours used	83

Compute the total manufacturing cost assigned to Job P90.