Asked by Richy Amato on May 28, 2024
Verified
Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.The total manufacturing cost assigned to Job M is closest to:
A) $10,830
B) $7,400
C) $25,730
D) $7,500
Predetermined Manufacturing Overhead
The estimated overhead rate used to allocate manufacturing overhead costs to products or services based on activity levels.
Job M
A specific production or project operation identified by a unique job number for costing purposes.
- Acquire an understanding of the method involved in applying a plantwide predetermined manufacturing overhead rate.
- Calculate total manufacturing costs assigned to specific jobs.
Verified Answer
AV
Angel VillegasJun 03, 2024
Final Answer :
C
Explanation :
The first step is to calculate the estimated total overhead costs in the two departments.
Molding Finishing The second step is to combine the estimated manufacturing overhead costs in the two departments ($24,000 + $4,500 = $28,500)to calculate the plantwide predetermined overhead rate as follow: The overhead applied to Job M is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $5.70 per MH x (1,300 MHs + 600 MHs)
= $5.70 per MH x (1,900 MHs)
= $10,830
Job M's manufacturing cost:
Molding Finishing The second step is to combine the estimated manufacturing overhead costs in the two departments ($24,000 + $4,500 = $28,500)to calculate the plantwide predetermined overhead rate as follow: The overhead applied to Job M is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $5.70 per MH x (1,300 MHs + 600 MHs)
= $5.70 per MH x (1,900 MHs)
= $10,830
Job M's manufacturing cost:
Learning Objectives
- Acquire an understanding of the method involved in applying a plantwide predetermined manufacturing overhead rate.
- Calculate total manufacturing costs assigned to specific jobs.
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