Delta Machine Tool Incorporated produces a varied product line without the use of direct labor. An...

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Delta Machine Tool Incorporated produces a varied product line without the use of direct labor. An extensive setup procedure is re- quired. Because no single base for a predetermined overhead rate will provide Delta with reliable product cost information, overhead is classified into two cost pools and two predetermined overhead rates are used. For 2018, it is estimated that total overhead costs will consist of P525,000 of overhead related to setups and P900,000 of overhead related to machine usage. Total machine usage is ex- pected to be 3,600 hours for the year, and the total number of setups is expected to be 300. Job RST required parts and materials costing P56,000, 70 hours of machine time, and four setups. What is the cost of Job RST? Delta Machine Tool Incorporated produces a varied product line without the use of direct labor. An extensive setup procedure is re- quired. Because no single base for a predetermined overhead rate will provide Delta with reliable product cost information, overhead is classified into two cost pools and two predetermined overhead rates are used. For 2018, it is estimated that total overhead costs will consist of P525,000 of overhead related to setups and P900,000 of overhead related to machine usage. Total machine usage is ex- pected to be 3,600 hours for the year, and the total number of setups is expected to be 300. Job RST required parts and materials costing P56,000, 70 hours of machine time, and four setups. What is the cost of Job RST?

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To find the cost of Job RST we need to allocate overhead costs using the predetermined overhead rate... View the full answer