Levron Corporation Uses a Job-Order Costing System with a Single

Multiple Choice

Levron 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 $58,000, variable manufacturing overhead of $2.00 per machine-hour, and 20,000 machine-hours. The company has provided the following data concerning Job P978 which was recently completed: The predetermined overhead rate is closest to:

A) $2.90 per machine-hour
B) $2.00 per machine-hour
C) $4.90 per machine-hour
D) $6.90 per machine-hour