The amount of overhead applied in the Milling Department to Job A492 is closest to:

A) $146,200.00
B) $144.00
C) $756.00
D) $774.00

Question

The amount of overhead applied in the Milling Department to Job A492 is closest to:A) $146,200.00B) $144.00C) $756.00D) $774.00

Tanya Ridgeway · Accepted Answer

Final Answer : D, Explanation :  Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)= $119,000 + ($1.60 per machine-hour × 17,000 machine-hours)= $119,000 +$27,200 = $146,200Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $146,200 ÷ 17,000 machine-hours = $8.60 per machine-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $8.60 per machine-hour × 90 machine-hours = $774Reference: CH02-Ref42Kroeker 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 T898.The following data were recorded for this job:

The amount of overhead applied in the Milling Department to Job A492 is closest to:

A) $146,200.00
B) $144.00
C) $756.00
D) $774.00

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