Question

Sheffield Corp. thinks machine hours is the best activity base for its manufacturing overhead. The estimate of annual overhead costs for its jobs was $2850000. The company used 1000 hours of processing on Job No. B12 during the period and incurred overhead costs totaling $2900000. The budgeted machine hours for the year totaled 20000. How much overhead should be applied to Job No. B12

Answer 1

the overhead applied is $142,500

Step-by-step explanation:

The computation of the overhead applied is shown below:

= Estimated annual overhead cost ÷ budgeted machine hours × used hours

= $2,850,000 ÷ 20,000 machine hours × 1,000 hours

= $142,500

Hence, the overhead applied is $142,500

We simply applied the above formula