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 63,000 direct labor-hours, total fixed manufacturing overhead cost of $88,200, and a variable manufacturing overhead rate of $2.90 per direct labor-hour. Recently Job X387 was completed and required 210 direct labor-hours.


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



Overhead applied to Job X387 ____.

Answer 1

Answer:

$903

Explanation:

The computation of the applied overhead is shown below:

= (Fixed predetermined overhead rate + variable manufacturing overhead rate) × direct labor hours

where,

Fixed predetermined overhead rate is

= $88,200 ÷ 63,000 direct labor hours

= $1.40

Now the overhead applied is

= ($1.40 + $2.90) × 210 direct labor hours

= $903