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 68,000 direct labor-hours, total fixed manufacturing overhead cost of $115,600, and a variable manufacturing overhead rate of $4.40 per direct labor-hour. Recently Job X387 was completed and required 150 direct labor-hours.

Required:

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

Answer 1

CALACULATION OF THE AMOUNT OF OVERHEAD APPLIED TO JOB X387 :

GIVEN ,

FIXED MANFACTURING OVERHEAD COST = $115600

VARIABLE MANFACUTURING OVERHEAD = $4.40 per Direct labour hour

DIRECT LABOUR HOURS = 68000 Hrs

TOTAL MANFACTURING OVERHEAD COST = FIXED + VARIABLE

= $115600 + ( 68000 × $4.40 )

= $115600 + $299200

= $414800.

PRE-DETERMINED OVERHEAD RATE = Total mfg. Overhead cost ÷ Direct labour hrs.

= $414800 ÷ 68000 hrs.

= $6.1 per DLH

THEREFORE,

AMOUNT OF OVERHEAD APPLIED TO JOB

= ACTUAL LABOUR HOURS × PREDETERMINED OVERHEAD RATE

= 150 DLH × $6.1

= $915.

_____×_____

ALL THE BEST,

HAPPY CHEGGING.