Asked by Ermina Coronas on Apr 25, 2024
Verified
Thrall 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 the following data: Recently Job K125 was completed and required 160 machine-hours.
Required:
Calculate the amount of overhead applied to Job K125.
Predetermined Overhead Rate
A rate used to allocate manufacturing overhead to individual products or job orders, based on a set formula prior to the start of a period.
Manufacturing Overhead
Indirect costs related to the production process, such as equipment maintenance and factory rent.
- Implement fixed overhead rates to assess manufacturing overhead for individual tasks.
Verified Answer
VH
Virginia Hernandez8 days ago
Final Answer :
Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base)= $50,000 + ($3.90 per machine-hour × 10,000 machine-hours)= $50,000 + $39,000 = $89,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $89,000 ÷ 10,000 machine-hours = $8.90 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $8.90 per machine-hour × 160 machine-hours = $1,424
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $89,000 ÷ 10,000 machine-hours = $8.90 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $8.90 per machine-hour × 160 machine-hours = $1,424
Learning Objectives
- Implement fixed overhead rates to assess manufacturing overhead for individual tasks.
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