Jeremy Corporation estimated manufacturing overhead costs for the year to be $500,000. Jeremy also estimated 8,000 machine hours and 2,000 direct labor hours for the year. It bases the predetermined overhead allocation rate on machine hours. On January 31, Job 25 was completed. It required 6 machine hours and 1 direct labor hour. What is the amount of manufacturing overhead allocated to the completed job? (Round your intermediate calculations to one decimal place)

Question

Quizplus · Accepted Answer

The predetermined overhead rate is calculated by dividing the estimated manufacturing overhead costs by the estimated machine hours: $500,000 / 8,000 machine hours = $62.5 per machine hour. For Job 25, which required 6 machine hours, the allocated overhead is 6 machine hours * $62.5 per machine hour = $375.00.

Jeremy Corporation Estimated Manufacturing Overhead Costs for the Year to Be