Question

Sheridan Corp. creates miniature wooden figurines that it sells to local stores around the state. Sheridan is switching to Activity-Based Costing (ABC) and has arrived at the following activitybased rates for their Manufacturing Overhead (MOH) allocation: $22.00 per direct labor hour, $17.00 per packaging hour, and $8.30 per inspection hour. A recent job required the following: 820 direct labor hours 192 packaging hours 90 inspection hours What is the amount of MOH that would be allocated to this most recent job based upon the predetermined activity-based rates?

1) $21304.00
2) $22051.00
3) $18361.00
4) $22910.70

Answer 1

The amount of MOH allocated to the recent job based on the predetermined activity-based rates is $22,051.00.

Step-by-step explanation:

To calculate the amount of Manufacturing Overhead (MOH) that would be allocated to the most recent job based on the predetermined activity-based rates, we need to multiply the number of hours for each activity by their respective rates and then sum them up.

Based on the given rates, we can calculate:

• MOH for direct labor hours: $22.00 x 820 = $18,040.00
• MOH for packaging hours: $17.00 x 192 = $3,264.00
• MOH for inspection hours: $8.30 x 90 = $747.00

The total MOH allocated to the job is $18,040.00 + $3,264.00 + $747.00 = $21,051.00. Therefore, the correct answer is option 2) $22,051.00.