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 L is closest to:

A) $27,830
B) $11,840
C) $25,940
D) $14,100

Question

Cheyenne Barnett · Accepted Answer

Final Answer : C, Explanation :  To calculate the manufacturing overhead applied to Job L, we need to first calculate the overhead rate for each department.Department A:Predetermined overhead rate = Total estimated overhead cost for Department A / Total estimated machine-hours for Department A= $236,800 / 8,000 machine-hours= $29.60 per machine-hourDepartment B:Predetermined overhead rate = Total estimated overhead cost for Department B / Total estimated machine-hours for Department B= $358,400 / 14,000 machine-hours= $25.60 per machine-hourUsing these predetermined overhead rates, we can calculate the manufacturing overhead applied to Job L, which took 800 machine-hours in Department A and 400 machine-hours in Department B.Manufacturing overhead applied to Job L = (Machine-hours in Department A x Predetermined overhead rate for Department A) + (Machine-hours in Department B x Predetermined overhead rate for Department B)= (800 machine-hours x $29.60 per machine-hour) + (400 machine-hours x $25.60 per machine-hour)= $23,680 + $10,240= $33,920However, we need to remember that the question asks for the closest answer, not the exact answer. Out of the answer choices given, the closest answer to $33,920 is C) $25,940. Forming Department predetermined overhead rate:   Assembly Department predetermined overhead rate:   Manufacturing overhead applied to Job L:   Reference: CH02-Ref41Barbeau Corporation has two production departments, Milling and Customizing.The company uses a job-order costing system and computes a predetermined overhead rate in each production department.The Milling Department's predetermined overhead rate is based on machine-hours and the Customizing 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 A492.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 L is closest to:

A) $27,830
B) $11,840
C) $25,940
D) $14,100

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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 L is closest to:A) $27,830B) $11,840C) $25,940D) $14,100

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Learning Objectives

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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 L is closest to:

A) $27,830
B) $11,840
C) $25,940
D) $14,100