The amount of overhead applied to Job P951 is closest to:

A) $840
B) $300
C) $540
D) $240

Question

The amount of overhead applied to Job P951 is closest to:A) $840B) $300C) $540D) $240

Anna-Marie Montgomery · Accepted Answer

Final Answer : C, Explanation :  To find the amount of overhead applied we need to multiply the predetermined overhead rate by the actual hours worked on the job.Predetermined overhead rate = Total overhead cost / Total direct labor hours= $162,000 / 36,000 hours= $4.50 per direct labor hourActual direct labor hours on Job P951 = 120 hoursOverhead applied = Predetermined overhead rate x Actual direct labor hours= $4.50 per direct labor hour x 120 hours= $540 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)= $96,000 + ($3.00 per direct labor-hour × 40,000 direct labor-hours)= $96,000 + $120,000 = $216,000Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $216,000 ÷ 40,000 direct labor-hours = $5.40 per direct labor-hourOverhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $5.40 per direct labor-hour × 100 direct labor-hours = $540

The amount of overhead applied to Job P951 is closest to:

A) $840
B) $300
C) $540
D) $240

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