Question

Osakey aspect of the activity based costing mode wil systematically overcostkw volume products and unch we pro QUESTION 10 Lupo Corporation uses a job order costing system with a single plantwade predetermmed overhead based on machines. The company based its predetermined overhead rate for the current year on the following data Total machine hours Total fed manufacturing overhead cost Variable manufacturing overhead per machine hour 5455,000 $ 500 Recently, Job T687 was completed with the following characteristics Number of units in the job Total machine hours Direct materials Direct labor cost 10 40 $ 710 $ 1420 The amount of overhead applied to Job T687 is closest to $455.00 $875.60 $152.00 O $760.00 Hide screen Stop sharing

Answer 1

Overhead is applied on the basis of Machine Hours. Thus,

Overhead per machine hour = Fixed Cost/Machine hours + Variable Cost per hour => 455,000/32,500 + 5=> 14+5 = 19

Job 1687 requires 40 hours. So, 40*19 = $ 760.

Thus Option D is Correct.