Halbur Corporation has two manufacturing departments--Machining and Customizing. 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 J. 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 J is closest to:
A) $28,208
B) $18,748
C) $12,464
D) $15,744

Question

Halbur Corporation has two manufacturing departments--Machining and Customizing. 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 J. 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 J is closest to:
A) $28,208 
B) $18,748 
C) $12,464 
D) $15,744

Quizplus · Accepted Answer

The first step is to calculate the estimated total overhead costs in the two departments.
Machining
 11ea7761_1946_e0f8_81a5_4550a96ca3ce_TB2580_00 Customizing
 11ea7761_1946_e0f9_81a5_d13c159f71d4_TB2580_00 The second step is to combine the estimated manufacturing overhead costs in the two departments ($44,400 + $21,200 = $65,600) to calculate the plantwide predetermined overhead rate as follow:
 11ea7761_1946_e0fa_81a5_376d437d8d4a_TB2580_00 The overhead applied to Job J is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $6.56 per MH x (1,900 MHs + 2,400 MHs)
= $6.56 per MH x (4,300 MHs)
= $28,208

Halbur Corporation Has Two Manufacturing Departments--Machining and Customizing