Question

Heroux Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
Forming Customizing Total
Estimated total machine-hours (MHs) 3,000 7,000 10,000
Estimated total fixed manufacturing overhead cost $16,500 $20,300 $36,800
Estimated variable manufacturing overhead cost per MH $1.70 $2.50

During the most recent month, the company started and completed two jobs--Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow:

Job A Job H
Direct materials $12,800 $6,700
Direct labor cost $24,300 $7,800
Forming machine-hours 2,000 1,000
Customizing machine-hours 2,800 4,200

Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job H is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer:

Allocated MOH= $40,976

Explanation:

Giving the following information:

Estimated total fixed manufacturing overhead cost= $36,800

Estimated total machine-hours (MHs)= 10,000

Estimated variable manufacturing overhead cost per MH= ($1.70 $2.50)= $4.2

First, we need to calculate the estimated manufacturing overhead rate:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= (36,800/10,000) + 4.2= $7.88

Now, we can allocate overhead yo Job H:

Forming machine-hours= 1,000

Customizing machine-hours= 4,200

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 7.88*(1000 + 4,200)= $40,976