The amount of overhead applied to Job A578 is closest to:

A) $500
B) $1,350
C) $2,200
D) $850

Question

The amount of overhead applied to Job A578 is closest to:A) $500B) $1,350C) $2,200D) $850

Allen Martirosian · Accepted Answer

Final Answer : B, Explanation :  Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base)= $160,000 + ($3.40 per direct labor-hour × 80,000 direct labor-hours)= $160,000 + $272,000 = $432,000Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $432,000 ÷ 80,000 direct labor-hours = $5.40 per direct labor-hourOverhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $5.40 per direct labor-hour × 250 direct labor-hours = $1,350

The amount of overhead applied to Job A578 is closest to:

A) $500
B) $1,350
C) $2,200
D) $850

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