Asked by Jenna Grace Milionis on Jul 02, 2024
Verified
Fillmore Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 60,000 direct labor-hours, total fixed manufacturing overhead cost of $96,000, and a variable manufacturing overhead rate of $3.30 per direct labor-hour. Recently Job X809 was completed and required 100 direct labor-hours.Required:a. Calculate the estimated total manufacturing overhead for the year.b. Calculate the predetermined overhead rate for the year.c. Calculate the amount of overhead applied to Job X809.
Variable Manufacturing Overhead
The portion of manufacturing overhead costs that vary directly with production volume, such as supplies and indirect labor.
Fixed Manufacturing Overhead
Costs that do not vary with the level of production or sales, such as rent, property taxes, and salaries of permanent employees.
- Assess the anticipated yearly aggregate expenses for manufacturing overhead.
- Work out the predetermined overhead rate for the upcoming year.
- Compute the distribution of overhead charges among specific tasks.
Verified Answer
VM
Valerie Miller4 days ago
Final Answer :
a. 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) = $96,000 + ($3.30 per direct labor-hour × 60,000 direct labor-hours) = $96,000 + $198,000 = $294,000b. Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $294,000 ÷ 60,000 direct labor-hours = $4.90 per direct labor-hourc. Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $4.90 per direct labor-hour × 100 direct labor-hours = $490
Learning Objectives
- Assess the anticipated yearly aggregate expenses for manufacturing overhead.
- Work out the predetermined overhead rate for the upcoming year.
- Compute the distribution of overhead charges among specific tasks.
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