Order Online views machine hours as the best activity base for its manufacturing overhead.The estimate of overhead costs for the year for its jobs was $205,000.The company used 1,000 hours of processing on its Job B12 during the period and incurred overhead costs totalling $210,000.The budgeted machine hours for the year totalled 20,000.How much overhead should be applied to Job B12?

Question

Quizplus · Accepted Answer

The overhead rate is calculated as $205,000 / 20,000 hours = $10.25 per machine hour. For Job B12, with 1,000 hours of processing, the overhead applied is 1,000 hours * $10.25/hour = $10,250.

Order Online Views Machine Hours as the Best Activity Base