Asked by Makayla Kortz on Jul 03, 2024
Verified
The amount of overhead applied in the Machining Department to Job K928 is closest to:
A) $783.00
B) $810.00
C) $162.00
D) $171,000.00
Overhead Applied
is the amount of manufacturing overhead cost allocated to each product or job, based on a predetermined overhead rate.
Machining Department
A section within a manufacturing facility where machining processes, such as cutting, shaping, and drilling, are carried out.
- Gain insight into the allocation of overhead in diverse production areas.
Verified Answer
MR
marco RomeroJul 08, 2024
Final Answer :
B
Explanation :
The question does not provide enough information to calculate the exact amount of overhead applied to Job K928. However, we can use the predetermined overhead rate of $27 per machine hour to estimate the amount. The question states that Job K928 incurred 30 machine hours in the Machining Department. Thus, the total amount of overhead applied would be 30 machine hours x $27 per machine hour = $810. Therefore, the closest answer choice is B) $810.00.
Explanation :
Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)
= $136,800 + ($1.80 per machine-hour × 19,000 machine-hours)
= $136,800 +$34,200 = $171,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $171,000 ÷ 19,000 machine-hours = $9.00 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.00 per machine-hour × 90 machine-hours = $810
= $136,800 + ($1.80 per machine-hour × 19,000 machine-hours)
= $136,800 +$34,200 = $171,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $171,000 ÷ 19,000 machine-hours = $9.00 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.00 per machine-hour × 90 machine-hours = $810
Learning Objectives
- Gain insight into the allocation of overhead in diverse production areas.
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