Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments.The manufacturing overhead applied to Job H is closest to:

A) $22,680
B) $30,888
C) $29,880
D) $7,200

Question

Justin Wildman · Accepted Answer

Final Answer : C, Explanation :  The predetermined overhead rates for each department are calculated as follows:Department A: Estimated Total Manufacturing Overhead / Estimated Total Machine-Hours = $310,000 / 31,000 MH = $10 per MHDepartment B: Estimated Total Manufacturing Overhead / Estimated Total Machine-Hours = $470,000 / 470,000 MH = $1 per MHUsing these rates, we can calculate the manufacturing overhead applied to Job H:Department A Usage: 1,800 MH x $10 per MH = $18,000Department B Usage: 300 MH x $1 per MH = $300Total Manufacturing Overhead Applied to Job H: $18,000 + $300 = $18,300However, we also know that the manufacturing overhead costs incurred in Department A during May were $22,500, which means that some of the overhead applied to Job H was overapplied, or not actually incurred.To adjust for this overapplied overhead, we can use the following calculation:Manufacturing Overhead Overapplied in Dept. A = Manufacturing Overhead Applied - Manufacturing Overhead Incurred = $18,000 - $22,500 = -$4,500This means that we need to subtract $4,500 from the total manufacturing overhead applied to Job H:Adjusted Manufacturing Overhead Applied to Job H: $18,300 - $4,500 = $13,800Therefore, the closest option to the manufacturing overhead applied to Job H is $29,880. Forming Department predetermined overhead rate:   Customizing Department predetermined overhead rate:   Manufacturing overhead applied to Job H:   Reference: CH02-Ref35Tiff Corporation has two production departments, Casting and Assembly.The company uses a job-order costing system and computes a predetermined overhead rate in each production department.The Casting Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours.At the beginning of the current year, the company had made the following estimates:   During the current month the company started and finished Job P131.The following data were recorded for this job:

Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments.The manufacturing overhead applied to Job H is closest to:

A) $22,680
B) $30,888
C) $29,880
D) $7,200

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Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments.The manufacturing overhead applied to Job H is closest to:A) $22,680B) $30,888C) $29,880D) $7,200

Definitions

Learning Objectives

Learning Objectives

Related questions

Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments.The manufacturing overhead applied to Job H is closest to:

A) $22,680
B) $30,888
C) $29,880
D) $7,200