Question

At the beginning of the year, a company predicts total overhead costs of $960,000. The company applies overhead using machine hours and estimates it will use 1,600 machine hours during the year. What amount of overhead should be applied to Job 65A if that job uses 33 machine hours during January?

Answer 1

Answer: Amount of overhead should be applied to Job 65A = $19800

Step-by-step explanation:

Given that,

Company predicts total overhead costs = $960,000

Machine hours during the year = 1,600

Predetermined overhead rate =
`(Overhead\ Costs)/(Machine\ hours)`

=
`(960000)/(1600)`

=$ 600\ Machine hour

Therefore,

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

= $ 600 × 33

= $19800