Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Manufacturing overhead costs are allocated based on machine-hours in the Machining Department and based on direct labor-hours in the Assembly Department.
Machining:
Machine-hours= 50,000
Manufacturing overhead costs= $ 280,000
Assembly:
Direct labor-hours= 40,000
Manufacturing overhead costs= $ 360,000
First, we need to calculate the estimated overhead rate for each department:
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
<u>Machining:</u>
Estimated manufacturing overhead rate= 280,000/50,000= $5.6 per machine hour
<u>Assembly:</u>
Estimated manufacturing overhead rate= 360,000/40,000= $9 per direct labor hour
Now, we can allocate overhead to Job 316:
Machining Assembly
Direct labor-hours 120 75
Machine-hours 45 5
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Machining:
Allocated MOH= 5.6*45= $252
Assembly:
Allocated MOH= 9*75= $675
