Question

Merati Corporation has two manufacturing departments--Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Estimated total machine-hours (MHS) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Forming 5,000 $ 28,000 $ 1.80 Assembly 5,000 $ 10,500 $ 2.60 Total 10,000 $ 38,500 During the most recent month, the company started and completed two jobs-- Job B and Job L. There were no beginning inventories Data concerning those two jobs follow Forming machine-hours Assembly machine-hours Job B 3,400 2,000 Job L 1,600 3,000 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job L is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

	Predetermined overhead rate
Forming [ ( 28000 / 5000 ) + 1.80 ]	7.40
Assembly [ ( 10500 / 5000 ) + 2.60 ]	4.70

Overhead allocation :	Job L
Forming [ 7.40 * 1600 ]	11840
Assembly [ 4.70 * 3000 ]	14100
Total manufacturing overhead allocated	25940