Vektek Inc.thinks machine hours is the best activity base for its manufacturing overhead.The estimate of annual overhead costs for its jobs was $2050000.The company used 1000 hours of processing on Job No.B12 during the period and incurred overhead costs totaling $2100000.The estimated machine hours for the year totaled 20000.How much overhead should be applied to Job No.B12?
A)$2100
B)$102500
C)$105000
D)$2050

Question

Quizplus · Accepted Answer

Overhead rate = $2050000/20000 = $102.50 per machine hourOverhead applied to Job No. B12 = 1000 hours x $102.50 = $102500