Question

Stoke Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department’s predetermined overhead rate is based on machine-hours and the Assembly Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Assembly Machine-hours 20,000 15,000 Direct labor-hours 2,000 7,000 Total fixed manufacturing overhead cost $ 138,000 $ 58,100 Variable manufacturing overhead per machine-hour $ 2.30 Variable manufacturing overhead per direct labor-hour $ 3.00 During the current month the company started and finished Job A460. The following data were recorded for this job: Job A460: Forming Assembly Machine-hours 80 10 Direct labor-hours 30 50 The amount of overhead applied in the Assembly Department to Job A460 is closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice $415.00 $150.00 $565.00 $79,100.00

Answer 1

Answer
Variable manufacturing overhead per direct labor hour	3.0
Fixed manufacturing overhead per direct labor hour	8.3	58100 / 7000
Predetermined overhead rate	11.3	per direct labor hour
Direct labor hours Assembly	50.0
X Predetermined overhead rate	11.3
Overhead applied in Assembly Department to Job A460	$      565
Option C is Correct
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