Question

g "Marty's Metal Shop uses a job order cost system. It applies overhead to jobs at a rate of 175% of direct labor costs. Job No. 2617 required $800 in direct labor costs. The job was initially budgeted to require $850 in direct labor costs. Overhead applied to Job No. 2617 during the period amounted to:"

Answer 1

Allocated MOH= $1,400

Step-by-step explanation:

Giving the following information:

Predetermined overhead rate=175% of direct labor costs

Job No. 2617:

Actual direct labor= $800

To calculate the allocated overhead, we need to use the following formula:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 1.75*800

Allocated MOH= $1,400