The total amount of overhead applied in both departments to Job K928 is closest to:

A) $1,405
B) $2,000
C) $810
D) $595

Question

The total amount of overhead applied in both departments to Job K928 is closest to:A) $1,405B) $2,000C) $810D) $595

Kiera Hinkle · 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)= $136,800 + ($1.80 per machine-hour × 19,000 machine-hours)= $136,800 +$34,200 = $171,000Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $171,000 ÷ 19,000 machine-hours = $9.00 per machine-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $9.00 per machine-hour × 90 machine-hours = $810Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department)= $69,600 + ($3.20 per direct labor-hour × 8,000 direct labor-hours)= $69,600 + $25,600 = $95,200Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $95,200 ÷8,000 direct labor-hours = $11.90 per direct labor-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $11.90 per direct labor-hour × 50 direct labor-hours = $595Overhead applied to Job K928

The total amount of overhead applied in both departments to Job K928 is closest to:

A) $1,405
B) $2,000
C) $810
D) $595

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