The amount of overhead applied in the Machining Department to Job A803 is closest to:

A) $828.00
B) $792.00
C) $171.00
D) $174,800.00

Question

The amount of overhead applied in the Machining Department to Job A803 is closest to:A) $828.00B) $792.00C) $171.00D) $174,800.00

Maggie Zwahlen · Accepted Answer

Final Answer : A, Explanation :  Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)= $138,700 + ($1.90 per machine-hour × 19,000 machine-hours)= $138,700 +$36,100 = $174,800Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $174,800 ÷ 19,000 machine-hours = $9.20 per machine-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.20 per machine-hour × 90 machine-hours = $828Reference: CH02-Ref39Ahlheim Corporation has two production departments, Forming and Assembly.The company uses a job-order costing system and computes a predetermined overhead rate in each production department.The Forming 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 T924.The following data were recorded for this job:

The amount of overhead applied in the Machining Department to Job A803 is closest to:

A) $828.00
B) $792.00
C) $171.00
D) $174,800.00

Definitions

Learning Objectives

Learning Objectives

Related questions