Question

ehner 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 the following data: Total direct labor-hours 40,000 Total fixed manufacturing overhead cost $ 96,000 Variable manufacturing overhead per direct labor-hour $ 3.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 20 Total direct labor-hours 80 Direct materials $ 755 Direct labor cost $ 4,000 The amount of overhead applied to Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.) A. $432 B. $540 C. $240 D. $800

Answer 1

Allocated MOH= $432

Step-by-step explanation:

Giving the following information:

Total direct labor-hours 40,000

Total fixed manufacturing overhead cost $ 96,000

Variable manufacturing overhead per direct labor-hour $ 3.00

Job P951:

Total direct labor-hours 80

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= (96,000/40,000) + 3

Predetermined manufacturing overhead rate= $5.4 per direct labor-hour

Now, we can allocate overhead:

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

Allocated MOH= 5.4*80

Allocated MOH= $432