Metalworks applies manufacturing overhead on the basis of direct materials used in production.During the current period,direct materials used for Job #123 amounted to $22,545.If Metalworks' overhead rate is 0.65 of direct materials used,the overhead applied to Job #123 for the period is $15,000.

Question

Quizplus · Accepted Answer

The overhead applied to Job #123 should be calculated as:
Overhead Applied = Direct Materials Used x Manufacturing Overhead Rate
Overhead Applied = $22,545 x 0.65
Overhead Applied = $14,635.25
Therefore, the overhead applied to Job #123 should be $14,635.25, not $15,000.

Metalworks Applies Manufacturing Overhead on the Basis of Direct Materials