Lupo 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 the following data: Total machine-hours 30,000 Total fixed manufacturing overhead cost $ 252,000 Variable manufacturing overhead per machine-hour $ 2.10 Recently, Job T687 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $ 675 Direct labor cost $ 1,050 The estimated total manufacturing overhead is closest to:

Total estimated manufacturing overhead= $315,000

Explanation:

Giving the following information:

Estimates:

Total machine-hours 30,000

Total fixed manufacturing overhead cost $ 252,000

Variable manufacturing overhead per machine-hour $ 2.10

Total estimated manufacturing overhead= fixed overhead + total variable overhead

Total estimated manufacturing overhead= 252,000 + 30,000*2.1

Total estimated manufacturing overhead= $315,000

Manufacturing overhead applied 315

Total cost of Job T687 $2,040

Explanation:

Lupo Corporation

Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base

Hence:

$252,000 + ($2.10 per machine-hour × 30,000 machine-hours) = $252,000 + $63,000 = $315,000

Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base

= $315,000 ÷ 30,000 machine-hours = $10.50 per machine-hour

Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job

= $10.50 per machine-hour × 30 machine-hours = $315

Direct materials$ 675

Direct labor 1,050

Manufacturing overhead applied 315

Total cost of Job T687 $2,040

Therefore the estimated total manufacturing overhead is closest to $315 and the Total cost of Job T687 is $2,040

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