Question

Smarty Pants Corporation manufactures high end custom batches of designer pant suits. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 612 are as​ follows: Direct materials used $ 5 comma 500 Direct labor hours worked 380 Machine hours used 500 Direct labor rate per hour $ 23 Predetermined overhead rate based on machine hours $ 15 What amount of manufacturing overhead would be allocated to Job​ 612?

Answer 1

The amount of manufacturing overhead would be allocated to Job​ 612 is $7,500

Step-by-step explanation:

The computation of the allocated manufacturing overhead is shown below:

= Predetermined overhead rate × Machine hours used

= $15 × 500 machine hours

= $7,500

Since in the question, it is mentioned that the Predetermined overhead rate based on machine hours so we multiply both the items for computing the allocated manufacturing overhead

Moreover, the formula to compute the predetermined overhead rate is shown below:

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours)