When applying manufacturing overhead to jobs, the formula to calculate the amount is as follows:
A) Predetermined overhead rate divided by the actual manufacturing overhead incurred on the particular job.
B) Predetermined overhead rate times the actual manufacturing overhead incurred on the particular job.
C) Predetermined overhead rate divided by the actual units of allocation base charged to the particular job.
D) Predetermined overhead rate times the actual units of allocation base charged to the particular job.

Question

Quizplus · Accepted Answer

The correct formula to apply manufacturing overhead to jobs is to multiply the predetermined overhead rate by the actual units of allocation base charged to the particular job. This is because the predetermined overhead rate is calculated by dividing the estimated total manufacturing overhead costs by the estimated total units of allocation base, and the actual units of allocation base are used to apply the overhead to the job based on the actual level of activity.

When Applying Manufacturing Overhead to Jobs, the Formula to Calculate