Sanderlin Corporation has two manufacturing departments--Machining and Finishing. 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 C and Job L. 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 L is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $29,900
B) $11,680
C) $28,780
D) $17,100

Question

Sanderlin Corporation has two manufacturing departments--Machining and Finishing. 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 C and Job L. 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 L is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $29,900 
B) $11,680 
C) $28,780 
D) $17,100

Quizplus · Accepted Answer

First, we need to calculate the predetermined overhead rate for each department:
Machining department: $1,180,000 / 140,000 machine-hours = $8.43 per machine-hour
Finishing department: $720,000 / 90,000 machine-hours = $8.00 per machine-hour

Using these rates, we can calculate the manufacturing overhead applied to each job:
Job C:
Machining department: 1,800 machine-hours x $8.43 = $15,174
Finishing department: 1,500 machine-hours x $8.00 = $12,000
Total manufacturing overhead applied: $27,174

Job L:
Machining department: 1,500 machine-hours x $8.43 = $12,645
Finishing department: 1,200 machine-hours x $8.00 = $9,600
Total manufacturing overhead applied: $22,245

Therefore, the manufacturing overhead applied to Job L is closest to $28,780 (Option C).

Sanderlin Corporation Has Two Manufacturing Departments--Machining and Finishing