Dejarnette 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: The estimated total manufacturing overhead is closest to:
A) $416,003
B) $248,000
C) $664,000
D) $416,000

Question

Dejarnette 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:  The estimated total manufacturing overhead is closest to:
A) $416,003 
B) $248,000 
C) $664,000 
D) $416,000

Quizplus · Accepted Answer

Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $416,000 + ($3.10 per machine-hour× 80,000 machine-hours) = $416,000 + $248,000 = $664,000

Dejarnette Corporation Uses a Job-Order Costing System with a Single