Question

Parido Corporation has two manufacturing departments--Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Assembly Total Estimated total machine-hours (MHs) 8,000 2,000 10,000 Estimated total fixed manufacturing overhead cost $44,000 $4,200 $48,200 Estimated variable manufacturing overhead cost per machine-hour $ 1.90 $ 3.00 During the most recent month, the company started and completed two jobs--Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job A Job H Casting machine-hours 5,400 2,600 Assembly machine-hours 800 1,200 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job H is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer:

Allocated MOH= $26,372

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

Total fixed overhead= 48,200

Total variable overhead= (1.9*8,000) + (3*2,000)= $21,200

Predetermined manufacturing overhead rate= (48,200 + 21,200) / 10,000

Predetermined manufacturing overhead rate= $6.94 per machine hour

Now, we can allocate overhead to Job H:

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

Allocated MOH= 6.94*(2,600 + 1,200)

Allocated MOH= $26,372