Answer:
Instructions are below.
Explanation:
<u>First, we need to calculate the predetermined overhead rate for each activity:</u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Materials handling= 12,000/3,000= $4 per part
Machine setup= 3,400/10= $340 per setup
Insertion of parts= 48,000/3,000= $16 per part
Finishing= 80,000/2,000= $40 per finishing direct labor hour
Job 420 used 150 parts, required 2 setups and consumed 100 finishing hours.
Job 510 used 500 parts, required 4 setups and consumed 310 finishing hours.
<u>To allocate costs, we need to use the following formula:</u>
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
<u>Job 420:</u>
Materials handling= 4*150= $600
Machine setup= 340*2= $680
Insertion of parts= 16*150= $2,400
Finishing= 40*100= $4,000
Total allocated cost= $7,680
<u>Job 510:</u>
Materials handling= 4*500= $2,000
Machine setup= 340*4= $1,360
Insertion of parts= 16*500= $8,000
Finishing= 40*310= $12,400
Total allocated cost= $23,760
