Question

quiz TB MC Qu. 2-69 Mahon Corporation has two production departments.. 005432 company had made the following estimates: 18,000 2,000 $124,200 14,000 7,000 $68,600 3.80 30 60 Prex9 of 10

Answer 1

Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department) = $68,600 + ($3.80 per direct labor-hour × 7,000 direct labor-hours) = $68,600 + $26,600 = $95,200

Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $95,200 ÷ 7,000 direct labor-hours = $13.60 per direct labor-hour

Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.60 per direct labor-hour × 60 direct labor-hours = $816