Parido Corporation has two manufacturing departments--Casting 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 A and Job H.There were no beginning inventories.Data concerning those two jobs follow:
Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.The amount of manufacturing overhead applied to Job H is closest to:

Question

Parido Corporation has two manufacturing departments--Casting 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 A and Job H.There were no beginning inventories.Data concerning those two jobs follow:
 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.The amount of manufacturing overhead applied to Job H is closest to:

Quizplus · Accepted Answer

The first step is to calculate the estimated total overhead costs in the two departments.
Casting
 11ea7761_1920_6d53_81a5_a74fd89a3e14_TB2580_00 Assembly
 11ea7761_1920_9464_81a5_0d2665beee38_TB2580_00 The second step is to combine the estimated manufacturing overhead costs in the two departments ($59,200 + $10,200 = $69,400) to calculate the plantwide predetermined overhead rate as follow:
 11ea7761_1920_9465_81a5_c14d21af5bf8_TB2580_00 The overhead applied to Job H is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $6.94 per MH x (2,600 MHs + 1,200 MHs)
= $6.94 per MH x (3,800 MHs)
= $26,372

Parido Corporation Has Two Manufacturing Departments--Casting and Assembly