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:
A)$8,328
B)$26,372
C)$18,316
D)$18,044

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:
A)$8,328 
B)$26,372 
C)$18,316 
D)$18,044

Quizplus · Accepted Answer

The first step is to calculate the estimated total overhead costs in the two departments.
Casting 11ea7998_5f52_e758_911b_a787a69a115f_TB2627_00_TB2627_00 Assembly 11ea7998_5f53_0e69_911b_df6af41c49b3_TB2627_00_TB2627_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: 11ea7998_5f53_0e6a_911b_b72bc83e8edf_TB2627_00_TB2627_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