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Vesna [10]
3 years ago
6

Chelsea, Inc. uses the job costing method and uses direct labor hours as the allocation base. In 2016, the company estimated tha

t they would incur 250,000 direct labor hours and total overhead costs of $2,500,000. Actual overhead costs for Job 3489 were $275,000 and actual direct labor hours were 28,000. Which of the following represents the MOH allocated to Job 3489?
a. Predetermined MOH rate= total estimated manufacturing overhead costs/ total estimated amount of the allocation base
b. $250,000/ 25,000 DLH= $10
c. MOH allocated to job= predetermined MOH rate * actual amount of allocation base used by the job
d. $10 * 28,000 DLH= $280,000
Business
1 answer:
miskamm [114]3 years ago
7 0

Answer:

Allocated MOH= 10*28,000

Explanation:

<u>First, we need to calculate the predetermined overhead rate:</u>

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

Predetermined manufacturing overhead rate= 2,500,000 / 250,000

Predetermined manufacturing overhead rate= $10 per direct labor hour

<u>Now, we can allocate overhead:</u>

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

Allocated MOH= 10*28,000

Allocated MOH= $280,000

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