Question

​Sybil, Inc. uses a predetermined overhead allocation rate to allocate manufacturing overhead costs to jobs. The company recently completed Job 300X. This job used 13 machine hours and 5 direct labor hours. The predetermined overhead allocation rate is calculated to be $ 45 per machine hour. What is the amount of manufacturing overhead allocated to Job 300X using machine hours as the allocation​ base?

Answer 1

Manufacturing overhead = $540

Explanation:

Given:

machine hours used by the job = 13

Direct labor hour = 5

Predetermined overhead allocation rate = $ 45 per machine hour

Now,

Predetermined overhead allocation rate =
`\frac{\textup{Manufacturing overhead}}{\textup{Machine hours required}}`

on substituting the respective values, we get

45 =
`\frac{\textup{Manufacturing overhead}}{\textup{12}}`

or

Manufacturing overhead = 45 × 12

or

Manufacturing overhead = $540