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5 July, 04:30

MNO Corporation uses a job-order costing system with a predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following dа ta:Total estimated direct labor-hours 50,000Total estimated fixed manufacturing overhead cost $ 285,000Estimated variable manufacturing overhead per direct labor-hour $ 3.80Recently, Job P123 was completed with the following characteristics:Total actual direct labor-hours 20Direct materials $ 710Direct labor cost $ 500The total job cost for Job P123 is closest to: (Round your intermediate calculations to 2 decimal places.)

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  1. 5 July, 04:54
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    Total cost for Job P123 = $1,400

    Explanation:

    For Job P123 we have following information

    Total labor hours = 20

    Direct Materials = $710

    Direct Labor cost = $500

    Manufacturing Overhead cost = 20 hours X $3.8 per labor hour = $76

    Fixed Manufacturing Overhead Cost Allocated to this job =

    ($285,000 / 50,000) X 20 hours = $114

    The total cost for Job P123 = $710 + $500 + $76 + $114 = $1,400

    Note: Fixed Manufacturing cost is allocated based on number of actual direct labor hours, as the entire activity of the organisation is not provided.

    The total cost for Job P123 = $1,400
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