Question

At the beginning of the year, a company predicts total overhead costs of $770,100. The company applies overhead using machine hours and estimates it will use 1,510 machine hours during the year. What amount of overhead should be applied to Job 65A if that job uses 24 machine hours during January

Answer 1

Answer:

$12,240

Explanation:

For the computation of the amount of overhead first we need to find out the predetermined overhead rate which is shown below:-

Predetermined overhead rate = Overhead cost ÷ Machine hours

= $770,100 ÷ 1,510

= $510

Amount of overhead should be applied to Job 65A = Predetermined overhead rate × Machine hours during January

= $510 × 24

= $12,240

We simply applied the above formula