Question

# Harootunian Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on...

Harootunian Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:

 Total machine-hours 80,000 Total fixed manufacturing overhead cost \$ 312,000 Variable manufacturing overhead per machine-hour \$ 2.10

Recently, Job T629 was completed with the following characteristics:

 Number of units in the job 50 Total machine-hours 200

The amount of overhead applied to Job T629 is closest to:

Multiple Choice

• \$1,620

• \$780

• \$1,200

• \$420

Estimated total Manufacturing OVERHEAD cost = estimated total fixed Manufacturing overhead cost +(estimated variable Manufacturing OVERHEAD per machine hour × estimated total machine hours)

= \$312000+(\$2.10×80000) =\$312000+\$168000 = \$480000

Pre determined OVERHEAD rate= estimated total Manufacturing OVERHEAD cost/estimated total machine hours

= \$480000/80000= \$6

Amount of overhead appiled to job T629 = pre determined OVERHEAD rate × total machine hours

= \$6×200 = \$1200

Amount of overhead appiled to job T629 = \$1200

ALL THE BEST

THANK YOU

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