Dehner 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 the following data: Recently, Job P951 was completed with the following characteristics:
The amount of overhead applied to Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $840
B) $300
C) $540
D) $240

Question

Dehner 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 the following data:  Recently, Job P951 was completed with the following characteristics:
 The amount of overhead applied to Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $840 
B) $300 
C) $540 
D) $240

Quizplus · Accepted Answer

First, we need to calculate the predetermined overhead rate:
Predetermined overhead rate = Estimated total overhead cost / Estimated total direct labor-hours
= $336,000 / 42,000 DLH
= $8 per DLH

Next, we need to calculate the total cost of Job P951:
Total cost = Direct materials + Direct labor + Manufacturing overhead applied
= $800 + $2,000 + $540
= $3,340

Manufacturing overhead applied = Predetermined overhead rate x Actual direct labor-hours
= $8 per DLH x 67.5 DLH
= $540

Therefore, the amount of overhead applied to Job P951 is $540, which is closest to answer choice C.

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