The total amount of overhead applied in both departments to Job T268 is closest to:

A) $616
B) $715
C) $2,046
D) $1,331

Question

The total amount of overhead applied in both departments to Job T268 is closest to:A) $616B) $715C) $2,046D) $1,331

Patricia Cordova · Accepted Answer

Final Answer : D, Explanation :  Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)= $102,000 + ($1.70 per machine-hour × 17,000 machine-hours)= $102,000 +$28,900 = $130,900Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $130,900 ÷ 17,000 machine-hours = $7.70 per machine-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.70 per machine-hour × 80 machine-hours = $616Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department)= $61,200 + ($4.10 per direct labor-hour × 6,000 direct labor-hours)= $61,200 + $24,600 = $85,800Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $85,800 ÷6,000 direct labor-hours = $14.30 per direct labor-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $14.30 per direct labor-hour × 50 direct labor-hours = $715Overhead applied to Job T268

The total amount of overhead applied in both departments to Job T268 is closest to:

A) $616
B) $715
C) $2,046
D) $1,331

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