Harootunian 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: Recently, Job T629 was completed with the following characteristics:
The amount of overhead applied to Job T629 is closest to:
A) $1,620
B) $780
C) $1,200
D) $420

Question

Harootunian 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:  Recently, Job T629 was completed with the following characteristics:
 The amount of overhead applied to Job T629 is closest to:
A) $1,620 
B) $780 
C) $1,200 
D) $420

Quizplus · Accepted Answer

The predetermined overhead rate for the current year is $36 per machine-hour. Job T629 required 30 machine-hours (5 × 3 × 2), so the amount of overhead applied to the job is:
$36 per machine-hour × 30 machine-hours = $1,080.
Therefore, the closest choice is $1,200.

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