<span>If the hourly wage rises by ten percent next week while keeping all other expenses unchanged, the total payroll variance will increase by ten percent as well. This conclusion is based on the findings from the Smith BBQ Restaurant report.</span>
Answer:
a. $21 per machine hour
b. $4,855
Explanation:
a. The calculation for the plantwide predetermined overhead rate is detailed below:
Plantwide predetermined overhead rate formula is as follows:
= Variable overhead cost rate for each machine hour + Fixed overhead cost rate for each machine hour
= $2 + (Fixed manufacturing overhead cost ÷ Estimated machine hours)
= $2 + ($4,275,000 ÷ 225,000 machine hours)
= $2 + $19
= $21 per machine hour
b. The total manufacturing cost assigned is
Particulars Amount
Direct materials $1,702
Direct labor $1,221
Variable manufacturing overhead $168
(84 × $2)
Total variable cost $3,091
Add:
Fixed manufacturing overhead
(84 × $21) $1,764
Total manufacturing cost assigned
to Job P90 $4,855
