Question

Branin Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $160,000, variable manufacturing overhead of $3.40 per direct labor- hour, and 80,000 direct labor-hours. The company has provided the following data concerning Job A578 which was recently completed: Total direct labor-hours 250 Direct materials $ 715 Direct labor cost $ 9,000 The estimated total manufacturing overhead is closest to: Question 4 options: A) $160,003 B) $432,000 C) $160,000 D) $272,000

Answer 1

Answer:

Branin Corporation

The estimated total manufacturing overhead is closest to:

B) $432,000

Explanation:

a) Data and Calculations:

Job A578:

Total direct labor-hours 250

Direct materials $ 715

Direct labor cost $ 9,000

Total estimated fixed manufacturing overhead = $160,000

Variable manufacturing overhead = $3.40 per direct labor-hour

Direct labor-hours = 80,000

Total estimated variable manufacturing overhead = $272,000 (80,000 * $3.40)

Total estimated manufacturing overhead = $432,000 ($272,000 + $160,000)

Fixed manufacturing overhead rate = $2 ($160,000/80,000)

Overhead applied to Job A578:

Variable overhead $3.40 * 250 = $850

Fixed overhead $2.00 * 250 =       500

Total overhead applied to job =   $1,350