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Question

Opunui Corporation has two manufacturing departments--Molding and Finishing. The company used the following data

at the beginning of the year to calculate predetermined overhead rates:


  Molding Finishing Total

Estimated total machine-hours (MHs) 4,000 1,000 5,000

Estimated total fixed manufacturing overhead cost $ 11,000 $ 2,900 $ 13,900

Estimated variable manufacturing overhead cost per MH $ 2.50 $ 5.00  

 


During the most recent month, the company started and completed two jobs--Job A and Job M. There were no beginning inventories. Data concerning those two jobs Follow:


   Job A Job M

Direct materials $ 14,100 $ 7,900

Direct labor cost $ 21,100 $ 7,900

Molding machine-hours 2,700 1,300

Finishing machine-hours 400 600

 


Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job M is closest to:

A)$10,982 B)$7,900 C)$26,782

Please explain correct answer.

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