Question

Marioni Corporation has two manufacturing departments--Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 7,000 3,000 $9,000 $ 2.60 10,000 $46,100 Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH $37,100 1.70 During the most recent month, the company started and completed two jobs--Job B and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job B Job H Forming machine-hours Assembly machine-hours 4,800 2,200 1,200 1,800 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job B is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Forming Department predetermined overhead rate:

Estimated total manufacturing overhead cost = Estimated fixed manufacturing overhead + Estimated variable manufacturing overhead

Estimated total manufacturing overhead cost = $37,100 + ($1.70 per MH × 7,000 MHs)

Estimated total manufacturing overhead cost = $49,000

Departmental predetermined overhead rate = Estimated total manufacturing overhead cost / Estimated total machine-hours

Departmental predetermined overhead rate = $49,000 / 7,000 MHs

Departmental predetermined overhead rate = $7.00 per MH

Assembly Department predetermined overhead rate:

Estimated total manufacturing overhead cost = Estimated fixed manufacturing overhead + Estimated variable manufacturing overhead

Estimated total manufacturing overhead cost = $9,000 + ($2.60 per MH × 3,000 MHs)

Estimated total manufacturing overhead cost = $16,800

Departmental predetermined overhead rate = Estimated total manufacturing overhead cost / Estimated total machine-hours

Departmental predetermined overhead rate = $16,800 / 3,000 MHs

Departmental predetermined overhead rate = $5.60 per MH

Manufacturing overhead applied to Job B:

Total manufacturing overhead applied = Forming + Assembly

Total manufacturing overhead applied = ($7.00 per MH × 4,800 MHs) + ($5.60 per MH × 1,200 MHs)

Total manufacturing overhead applied = $40,320