The amount of overhead applied to Job P505 is closest to:

A) $2,200
B) $1,760
C) $2,640
D) $440

Question

The amount of overhead applied to Job P505 is closest to:A) $2,200B) $1,760C) $2,640D) $440

Sophie Mayhugh · Accepted Answer

Final Answer : A, Explanation :  Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base)= $176,000 + ($2.20 per machine-hour × 20,000 machine-hours)= $176,000 + $44,000 = $220,000Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $220,000 ÷ 20,000 machine-hours = $11.00 per machine-hourOverhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $11.00 per machine-hour × 200 machine-hours = $2,200

The amount of overhead applied to Job P505 is closest to:

A) $2,200
B) $1,760
C) $2,640
D) $440

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