Question

5 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 66,000 direct labor-hours, total fixed manufacturing overhead cost of $99,000, and a variable manufacturing overhead rate of $4.50 per direct labor-hour. Recently Job X387 was completed and required 220 direct labor-hours. 10 points Required: Calculate the amount of overhead applied to Job X387. (Do not round intermediate calculations.) Skipped Overhead applied to Job X387 eBook References

Answer 1

ANSWER

Fixed predetermined overhead rate = Total fixed overhead cost/Total labor hours

                                                         = $ 99,000/66,000 = $ 1.5 PLH

Variable predetermined overhead rate = $ 4.50 PLH

Applied overhead rate = Fixed predetermined overhead rate + Variable predetermined overhead rate = $ 1.5 + $ 4.50 = $ 6 PLH

Applied overhead cost for Job X387 = Applied overhead rate x No. of labor hours required for job X387 = $ 6 x 220= $ 1,320

Overhead cost applied to job X387 is $ 1,320

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