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.)

Garrison 16e Rechecks 2017-06-28

Multiple Choice

$30,888

$24,948

$19,136

$5,940

Answer 1

Manufacturing overhead Forming	21600	=16500+(3000*1.7)
Manufacturing overhead Customizing	37800	=20300+(7000*2.5)
Total Manufacturing overhead	59400
Divide by Estimated total machine-hours	10000
Plantwide predetermined manufacturing overhead rate	5.94
	Job H
Total machine hours	5200	=1000+4200
X Predetermined manufacturing overhead rate	5.94
Amount of manufacturing overhead applied	30888
Option A 30,888 is correct