The amount of overhead applied in the Assembly Department to Job A460 is closest to:

A) $415.00
B) $150.00
C) $565.00
D) $79,100.00

Question

The amount of overhead applied in the Assembly Department to Job A460 is closest to:A) $415.00B) $150.00C) $565.00D) $79,100.00

Bradley Stewart · Accepted Answer

Final Answer : C, Explanation :  Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department)= $58,100 + ($3.00 per direct labor-hour × 7,000 direct labor-hours)= $58,100 + $21,000 = $79,100Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $79,100 ÷7,000 direct labor-hours = $11.30 per direct labor-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.30 per direct labor-hour × 50 direct labor-hours = $565Reference: CH02-Ref38Vanliere Corporation has two production departments, Machining and Finishing.The company uses a job-order costing system and computes a predetermined overhead rate in each production department.The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing 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 A803.The following data were recorded for this job:

The amount of overhead applied in the Assembly Department to Job A460 is closest to:

A) $415.00
B) $150.00
C) $565.00
D) $79,100.00

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