Question

Lupine Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 31,700 Total fixed manufacturing overhead cost $ 253,600 Variable manufacturing overhead per machine-hour $ 6.00 Recently, Job L716 was completed with the following characteristics: Number of units in the job 10 Total machine-hours 30 Direct materials $ 690 Direct labor cost $ 1,380 The amount of overhead applied to Job L716 is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer:

Allocated MOH= $420

Explanation:

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= (253,600/31,700) + 6

Predetermined manufacturing overhead rate= $14 per machine hour

Now, we can allocate overhead to Job L716:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 14*30

Allocated MOH= $420