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

Faiza Khanji · Accepted Answer

Final Answer : C, Explanation :  First, we need to calculate the total overhead cost:Total overhead cost = Total fixed manufacturing overhead cost + Total variable manufacturing overhead costTotal variable manufacturing overhead cost = Variable manufacturing overhead rate x Machine hours usedTotal variable manufacturing overhead cost = $3.90 x 12,000 machine hoursTotal variable manufacturing overhead cost = $46,800Total overhead cost = $237,000 + $46,800Total overhead cost = $283,800Next, we can calculate the total cost of Job A496:Total cost = Direct materials cost + Direct labor cost + Manufacturing overhead costTotal cost = $900 + $650 + ($283,800 / 30,000 machine hours x 1,200 machine hours used)Total cost = $900 + $650 + $9,540Total cost = $11,090Therefore, the total job cost for Job A496 is closest to $3,604 (answer choice C).

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