The amount of overhead applied in the Assembly Department to Job P131 is closest to:

A) $228.00
B) $558.00
C) $65,500.00
D) $786.00

Question

The amount of overhead applied in the Assembly Department to Job P131 is closest to:A) $228.00B) $558.00C) $65,500.00D) $786.00

Abigael Torres · Accepted Answer

Final Answer : D, Explanation :  Assembly Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department)= $46,500 + ($3.80 per direct labor-hour × 5,000 direct labor-hours)= $46,500 + $19,000 = $65,500Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $65,500 ÷5,000 direct labor-hours = $13.10 per direct labor-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.10 per direct labor-hour × 60 direct labor-hours = $786Reference: CH02-Ref36Eisentrout Corporation has two production departments, Machining and Customizing.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 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 T272.The following data were recorded for this job:

The amount of overhead applied in the Assembly Department to Job P131 is closest to:

A) $228.00
B) $558.00
C) $65,500.00
D) $786.00

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