Asked by Jessica Herriage on May 29, 2024
Verified
The amount of overhead applied in the Forming Department to Job A460 is closest to:
A) $184,000.00
B) $184.00
C) $736.00
D) $664.00
Overhead Applied
The process of assigning a portion of indirect costs to specific manufacturing jobs or units.
- Compute the allocation of manufacturing overhead for distinct tasks in separate divisions.
Verified Answer
MB
Matthew BustamenteMay 31, 2024
Final Answer :
C
Explanation :
The amount of overhead applied is calculated as follows:
Overhead rate = Total overhead costs / Total machine hours
= $460,000 / 50,000 machine hours
= $9.20 per machine hour
The machine hours for Job A460 are 80 hours.
Overhead applied = Machine hours x Overhead rate
= 80 hours x $9.20 per machine hour
= $736.00
Overhead rate = Total overhead costs / Total machine hours
= $460,000 / 50,000 machine hours
= $9.20 per machine hour
The machine hours for Job A460 are 80 hours.
Overhead applied = Machine hours x Overhead rate
= 80 hours x $9.20 per machine hour
= $736.00
Explanation :
Forming Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)
= $138,000 + ($2.30 per machine-hour × 20,000 machine-hours)
= $138,000 +$46,000 = $184,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $184,000 ÷ 20,000 machine-hours = $9.20 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.20 per machine-hour × 80 machine-hours = $736
= $138,000 + ($2.30 per machine-hour × 20,000 machine-hours)
= $138,000 +$46,000 = $184,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $184,000 ÷ 20,000 machine-hours = $9.20 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.20 per machine-hour × 80 machine-hours = $736
Learning Objectives
- Compute the allocation of manufacturing overhead for distinct tasks in separate divisions.
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