Asked by Karen Macauley on Apr 25, 2024
Verified
The amount of overhead applied in the Milling Department to Job A319 is closest to:
A) $142,200.00
B) $552.00
C) $96.00
D) $474.00
Overhead Applied
The portion of overhead costs allocated to the production of goods, based on a predetermined rate or method.
Milling Department
A specific division within a manufacturing facility where milling processes, such as grinding, crushing, or cutting, are performed on raw materials.
- Acquire knowledge on the assignment of overhead costs to various production departments.
Verified Answer
SK
Stephen Korankye7 days ago
Final Answer :
D
Explanation :
Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)
= $113,400 + ($1.60 per machine-hour × 18,000 machine-hours)
= $113,400 +$28,800 = $142,200
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $142,200 ÷ 18,000 machine-hours = $7.90 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.90 per machine-hour × 60 machine-hours = $474
= $113,400 + ($1.60 per machine-hour × 18,000 machine-hours)
= $113,400 +$28,800 = $142,200
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $142,200 ÷ 18,000 machine-hours = $7.90 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.90 per machine-hour × 60 machine-hours = $474
Learning Objectives
- Acquire knowledge on the assignment of overhead costs to various production departments.
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