Orange Corporation manufactures custom-made wallets. The following data pertains to Job GH7: $\begin{array}{lr}
\text { Direct materials placed into production } & \$ 5,000 \
\text { Direct labor hours worked } & 75 \text { hours } \
\text { Direct labor rate per hour } & \$ 35 \
\text { Machine hours worked } & 200 \text { hours }
\end{array}$
Factory overhead is applied using a plant-wide rate based on direct labor hours. Factory overhead was budgeted at $100,000 for the year, and the direct labor hours were estimated to be 25,000. Job GH7 consists of 60 units.
What is overhead cost assigned to Job GH7?

Question

Quizplus · Accepted Answer

Overhead cost assigned to Job GH7 = (Direct labor hours worked / Estimated direct labor hours) x Budgeted factory overhead= (75 hours / 25,000 hours) x $100,000= $240

Orange Corporation Manufactures Custom-Made Wallets Factory Overhead Is Applied Using a Plant-Wide Rate Based on Job