Question

Meenach Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on 54,000 direct labor-hours, total fixed manufacturing overhead cost of $54,000, and a variable manufacturing overhead rate of $2.40 per direct labor-hour. Recently Job X387 was completed and required 210 direct labor-hours.

Required:
Calculate the amount of overhead applied to Job X387. (Do not round intermediate calculations.)

Answer 1

Applied overhead = $714

Step-by-step explanation:

The total overhead to applied to Job X387 is the sum of the fixed overhead and the variable overhead to be applied.

Fixed overhead rate per hour = $54,000/54,000 labour hour

= $1 per hour

Variable overhead rate = $2.40 per labour hour

Applied overhead

Variable overhead= $2.40 × 210= 504

Fixed overhead = $1× 210= 210

Overhead 714

Applied overhead = $714