Vektek, Inc. thinks machine hours is the best activity base for its manufacturing overhead. The estimate of annual overhead costs for its jobs was $820,000. The company used 1,000 hours of processing on Job No. B12 during the period and incurred overhead costs totaling $840,000. The budgeted machine hours for the year totaled 20,000. How much overhead should be applied to Job No. B12?

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Quizplus · Accepted Answer

Overhead rate = $820,000 / 20,000 hours = $41 per hourOverhead applied to Job No. B12 = 1,000 hours x $41 per hour = $41,000