Asked by juan manuel iglesias on Apr 28, 2024
Verified
Kostelnik 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 $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: The amount of overhead applied to Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $1,256
B) $632
C) $944
D) $312
Overhead Applied
The amount of overhead cost allocated to specific products or cost centers based on a predetermined rate.
Job A496
A specific project or order identifier, representing a unique job or task within a job costing system.
Machine Hours
A measurement of the amount of time a machine is operated during a given period.
- Compute and comprehend the importance of applying manufacturing overhead to specific tasks.
Verified Answer
Total fixed overhead cost + (Variable overhead rate x Estimated machine hours)
= $237,000 + ($3.90 x 30,000)
= $237,000 + $117,000
= $354,000
Predetermined overhead rate = $354,000 / 30,000 machine-hours = $11.80 per machine-hour
To find the amount of overhead applied to Job A496,
Overhead applied = Machine-hours x Predetermined overhead rate
= 45 machine-hours x $11.80 per machine-hour
= $531
Therefore, the closest amount of overhead applied to Job A496 is $944, which is option C.
Learning Objectives
- Compute and comprehend the importance of applying manufacturing overhead to specific tasks.
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