Question

Bulla Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:

	Machining		Customizing
Machine-hours		13,000		11,000
Direct labor-hours		4,000		1,000
Total fixed manufacturing overhead cost	$	54,600	$	46,200
Variable manufacturing overhead per machine-hour	$	2.50
Variable manufacturing overhead per direct labor-hour			$	5.00

During the current month the company started and finished Job K369. The following data were recorded for this job:

Job K369:	Machining		Customizing
Machine-hours	90		10
Direct labor-hours	20		80

Required:

Calculate the total amount of overhead applied to Job K369 in both departments. (Do not round intermediate calculations.)

Overhead applied?

Answer 1

$4.20 [ 54600 13000] Predetermined rate for machining dept. - Predetermined rate for customizing dept. -$46.20 [ 46200 1000] Job K369: Variable overhead for machining $225 Variable overhead for Customizing-$400 [ 2.5*90] [5*80] I4.2*90] 46.2*80] fixed overhead for Customizing $3,696 Total amount of overhead applied $4,699