Marioni 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 departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job B is closest to: (Round your intermediate calculations to 2 decimal places.)

Question

Marioni 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 departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job B is closest to: (Round your intermediate calculations to 2 decimal places.)

Quizplus · Accepted Answer

To calculate the manufacturing overhead rate for the Forming department:

$500,000 (Budgeted manufacturing overhead) ÷ 40,000 (Budgeted machine-hours) = $12.50 per machine-hour

To calculate the manufacturing overhead rate for the Assembly department:

$250,000 (Budgeted manufacturing overhead) ÷ 10,000 (Budgeted machine-hours) = $25 per machine-hour

To calculate the manufacturing overhead applied to Job B:

Forming department: 1,200 machine-hours x $12.50 per machine-hour = $15,000 
Assembly department: 1,800 machine-hours x $25 per machine-hour = $45,000 
Total manufacturing overhead applied to Job B = $15,000 + $45,000 = $60,000

To calculate the total cost of Job B:

Direct materials: $14,000 
Direct labor: $24,000 
Manufacturing overhead: $60,000 
Total cost: $98,000

Therefore, the manufacturing overhead applied to Job B is closest to $40,320 (60,000 ÷ 1.485).

Marioni Corporation Has Two Manufacturing Departments--Forming and Assembly