Question

uses job order costing to measure and track product costs. Raleigh has determined that machine hours drive its manufacturing overhead costs. During the month of June, the following data were available for Product #95: Direct labor 350 hours at $10 per hour Direct materials 40 square yards at $25 per yard Machine hours used 1,000 hours If total manufacturing overhead costs during the month totaled $100,000 when a total of 25,000 machine hours were used, what will be the total manufacturing cost of Product #95?

Answer 1

Answer:

Allocated MOH= $4,000

Explanation:

Giving the following information:

Machine hours used 1,000 hours

If total manufacturing overhead costs during the month totaled $100,000 when a total of 25,000 machine hours were used

First, we need to calculate the estimated overhead rate:

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

Estimated manufacturing overhead rate= 100,000/25,000= $4 per machine hour

Now, we can allocate overhead to Product 95:

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

Allocated MOH= 4*1,000= $4,000