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:

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:

Quizplus · Accepted Answer

To calculate the manufacturing overhead applied to Job B, we need to first calculate the predetermined overhead rate for each department.

Forming Department: 
Predetermined overhead rate = Estimated total manufacturing overhead cost / Estimated total machine-hours 
= ($396,000 + $68,400) / 12,000 machine-hours 
= $40 per machine-hour

Assembly Department: 
Predetermined overhead rate = Estimated total manufacturing overhead cost / Estimated total machine-hours 
= ($284,400 + $68,400) / 8,000 machine-hours 
= $43 per machine-hour

Next, we can calculate the manufacturing overhead applied to Job B in each department:

Forming Department: 
Manufacturing overhead applied to Job B = Predetermined overhead rate × Actual machine-hours used 
= $40 per machine-hour × 800 machine-hours 
= $32,000

Assembly Department: 
Manufacturing overhead applied to Job B = Predetermined overhead rate × Actual machine-hours used 
= $43 per machine-hour × 600 machine-hours 
= $25,800

Total manufacturing overhead applied to Job B = Manufacturing overhead applied in Forming Department + Manufacturing overhead applied in Assembly Department 
= $32,000 + $25,800 
= $57,800

Therefore, the manufacturing overhead applied to Job B is closest to $40,320 (option C). Forming Department predetermined overhead rate: 11ea7998_5f65_d373_911b_81cfab7e83b2_TB2627_00_TB2627_00 Assembly Department predetermined overhead rate: 11ea7998_5f65_fa84_911b_410d433c4469_TB2627_00_TB2627_00 Manufacturing overhead applied to Job B: 11ea7998_5f65_fa85_911b_358bf4cfa7de_TB2627_00_TB2627_00

Marioni Corporation Has Two Manufacturing Departments--Forming and Assembly