Question

Lupo Corporation uses a job-order costing system with a single plantwide predetermined overheat and to The company based its predetermined overhead rate for the current year on the following data Total machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour 32.500 $455.000 SS 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: (Round your intermediate calculations to 2 decimal places) $760,00 $152.00 $455.00 $875.60

Answer 1

Answer:

Predetermined overhead rate     = ( Fixed Overhead Cost / Total Machine hours ) + Variable Overhead rate     =   ( $ 455,000 / 32,500 MH ) + $ 5     =     $ 14 + $ 5     =     $ 19

Predetermined overhead rate   =     $ 19

Total Amount of overhead applied                 =   Predetermined overhead rate x Applied machine hours                 =    $ 19 x 40                 =    $ 760

Amount of overhead applied to Job T 687 = $ 760

Option (a) is Correct