Question

upine Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 32,700 Total fixed manufacturing overhead cost $ 294,300 Variable manufacturing overhead per machine-hour $ 2.00 Recently, Job L716 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 20 Direct materials $ 545 Direct labor cost $ 1,090 The amount of overhead applied to Job L716 is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Total overhead applied = $220

Step-by-step explanation:

Total variable overhead estimated = Variable manufacturing overhead per machine-hour * Total machine-hours

Total variable overhead estimated = ($2 * 32,700)

= $65,400

Total overhead estimated = Total variable overhead estimated + Total fixed overhead estimated

Total overhead estimated = $65,400 + $294,300

Total overhead estimated = $359,700

Predetermined overhead rate = Total overhead estimated / Total machine hours

= $359,700 / 32,700

=$ 11 per machine hour

Hence, the total overhead applied = Predetermined overhead rate * Total machine hours L716

Total overhead applied = ($11 * 20)

Total overhead applied = $220