Job Order Costing

Morgan Company has two departments, Cutting and Machining. Overhead is applied based on direct labour cost in the Cutting Department and machine-hours in the Machining Department. The following information is available:

Budgeted Amounts Cutting Dept Machining Dept Direct labor cost $180,000 $165,000 Factory overhead $225,000 $180,000 Machine-hours 51,000 hours 40,000 hours Actual data for Job #10 Cutting Dept Machining Dept Direct materials requisitioned $10,000 $16,000 Direct labour cost $11,000 $14,000 Machine-hours 5,000 hours 3,000 hours Required
a)	Determine the total overhead cost of Job #10.	[4 marks]
b)	If Job # 10 consists of 50 units, calculate the total cost per unit.	[5 marks]
c)	Briefly explain why companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs.	[3 marks]