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Apples Inc. makes drones. It has two manufacturing departments - processing and finishing. The predetermined manufacturing...

Apples Inc. makes drones. It has two manufacturing departments - processing and finishing. The predetermined manufacturing overhead rate is 73% of the direct materials cost and $25 per machine hour for the two departments, respectively. The cost per machine hour equals $4.70. The accountant has the following information available for a particular job:

Processing Finishing
Machine Hours 399 207
Direct Materials Cost $503 $407

What is the total manufacturing overhead applied to this job?

Round your answer to 2 d.p.

Business   Accounting   
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Homework Answers

Answer #1

Since the overhead rate is given respectively I assume that 73% of material cost is overhead rate for processing and $25 per machine hour is for finishing department, so

Overhead applied :- Processing dept + Finishing dept

= $503*73% + 207 hours* $25

= $ 5542.19

Incase it's for both the departments then :-

Processing:- 399 hours * $ 25 + $503*73%

= $ 9975 + $ 367.19

= $10342.19

Finishing :- 207 hours*$25 + $407*73%

= $5175 + $ 297.11

= $ 5472.11

Total overhead applied to job = $ 15814.3 ( 10342.19 + 5472.11)

Prefer the 1st answer I.e. $ 5542.19

Incase of any query feel free to ask

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