If the company bases its predetermined overhead rate on the estimated amount of the allocation base for the upcoming year the amount of manufacturing overhead charged to the Job B04D is closest to:
A)$1,392.00
B)$1,551.46
C)$1,728.00
D)$1,883.91

Question

Quizplus · Accepted Answer

We need to first calculate the predetermined overhead rate using the estimated amount of the allocation base for the upcoming year. Let's assume the allocation base is direct labor hours and the estimated amount for the year is 6,000 hours. If the total estimated manufacturing overhead cost for the year is $108,000, then the predetermined overhead rate will be:

Predetermined overhead rate = Estimated manufacturing overhead cost / Estimated amount of allocation base

= $108,000 / 6,000 hours
= $18 per direct labor hour

Now, let's calculate the amount of manufacturing overhead charged to Job B04D. We are given that the job required 86 direct labor hours. Therefore, the manufacturing overhead charged to Job B04D will be:

Manufacturing overhead = Predetermined overhead rate x Actual amount of allocation base

= $18 per direct labor hour x 86 direct labor hours
= $1,548

Therefore, the closest answer among the given options is C) $1,728.00

If the Company Bases Its Predetermined Overhead Rate on the Estimated