Niles Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year:
Results of operations:

-If Omar Corporation applies overhead to jobs on the basis of direct labor-hours and Job 3 took 120 hours,how much overhead should be applied to that job?
A) $960
B) $360
C) $528
D) $288

Question

Niles Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year:
  Results of operations:
 
-If Omar Corporation applies overhead to jobs on the basis of direct labor-hours and Job 3 took 120 hours,how much overhead should be applied to that job?
A) $960 
B) $360 
C) $528 
D) $288

Quizplus · Accepted Answer

Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred
$24,000 = Predetermined overhead rate × 10,000 hours
Predetermined overhead rate = $24,000 ÷ 10,000 hours = $2.40 per hour
Overhead applied = $2.40 per hour × 120 hours = $288

Niles Corporation Is a Manufacturer That Uses Job-Order Costing