Carradine Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours.The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $105,000,variable manufacturing overhead of $3.00 per machine-hour,and 70,000 machine-hours.The company recently completed Job P233 which required 60 machine-hours.The amount of overhead applied to Job P233 is closest to:
A) $90
B) $270
C) $450
D) $180

Question

Quizplus · Accepted Answer

Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $105,000 + ($3.00 per machine-hour × 70,000 machine-hours) = $105,000 + $210,000 = $315,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $315,000 ÷ 70,000 machine-hours = $4.50 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $4.50 per machine-hour × 60 machine-hours = $270

Carradine Corporation Uses a Job-Order Costing System with a Single