Question

Morataya Corporation has two manufacturing departments--Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Assembly Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $ 39,200 $ 6,600 $ 45,800 Estimated variable manufacturing overhead cost per MH $ 1.90 $ 2.10 During the most recent month, the company started and completed two jobs--Job B and Job G. There were no beginning inventories. Data concerning those two jobs follow: Job B Job G Direct materials $ 14,800 $ 8,300 Direct labor cost $ 22,000 $ 8,900 Machining machine-hours 4,800 2,200 Assembly machine-hours 1,200 1,800 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job B is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer: $39,240

Explanation:

Total variable cost:

= (variable manufacturing overhead cost per MH × Estimated total machine-hours) of machining and Assembly

= (1.9 × 7000 + 2.1 × 3000)

= $19,600

$Overhead\ rate = \frac{Total\ overhead}{Total\ machine\ hours}$

$Overhead\ rate = \frac{45,800 + 19,600}{10,000}$

                                 = 6.54

Overhead applied to machine B:

=  Overhead rate × Machining machine-hours(4,800 + 2,200)

= 6.54 × 6,000

= $39,240