Mundorf Corporation has two manufacturing departments--Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: During the most recent month, the company started and completed two jobs--Job B and Job H. There were no beginning inventories. Data concerning those two jobs follow:
Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job B is closest to:

Question

Mundorf Corporation has two manufacturing departments--Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates:  During the most recent month, the company started and completed two jobs--Job B and Job H. There were no beginning inventories. Data concerning those two jobs follow:
 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job B is closest to:

Quizplus · Accepted Answer

The first step is to calculate the estimated total overhead costs in the two departments.
Forming
 11eacbfc_c6f6_ee73_8ffe_e1918ed32b85_TB7552_00 Assembly
 11eacbfc_c6f6_ee74_8ffe_7d4f39339184_TB7552_00 The second step is to combine the estimated manufacturing overhead costs in the two departments ($70,200 + $4,500 = $74,700) to calculate the plantwide predetermined overhead rate as follow:
 11eacbfc_c6f6_ee75_8ffe_e91553330264_TB7552_00 The overhead applied to Job B is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate × Machine-hours incurred by the job
= $7.47 per MH × (6,100 MHs + 400 MHs)
= $7.47 per MH × (6,500 MHs)
= $48,555

Mundorf Corporation Has Two Manufacturing Departments--Forming and Assembly