Grib Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs.The predetermined overhead rates for the year are 200% of direct labor cost for Department A and 50% of direct labor cost for Department B.Job 436, started and completed during the year, was charged with the following costs: The total manufacturing cost assigned to Job 436 was:
A)$360,000
B)$390,000
C)$270,000
D)$480,000

Question

Grib Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs.The predetermined overhead rates for the year are 200% of direct labor cost for Department A and 50% of direct labor cost for Department B.Job 436, started and completed during the year, was charged with the following costs:   The total manufacturing cost assigned to Job 436 was:
A)$360,000 
B)$390,000 
C)$270,000 
D)$480,000

Quizplus · Accepted Answer

To calculate the manufacturing overhead applied to Job 436, we need to determine the direct labor cost for each department.

For Department A: 
Direct Labor Cost = $120,000 
Manufacturing Overhead Applied = 200% * $120,000 = $240,000

For Department B: 
Direct Labor Cost = $90,000 
Manufacturing Overhead Applied = 50% * $90,000 = $45,000

Total Manufacturing Overhead Applied = $240,000 + $45,000 = $285,000

Therefore, the total manufacturing cost assigned to Job 436 is: 
Direct Materials + Direct Labor + Manufacturing Overhead Applied 
= $60,000 + $210,000 + $285,000 
= $555,000

Therefore, the correct answer is C) $270,000. Department A manufacturing overhead = Predetermined overhead rate × Amount of the allocation base incurred
$80,000 = 200% x Direct labor
Direct labor = $40,000
Department B manufacturing overhead = Predetermined overhead rate × Amount of the allocation base incurred = 50% x $60,000 = $30,000 11ea7998_5f6a_6765_911b_952d8ea85da1_TB2627_00_TB2627_00

Grib Corporation Uses a Predetermined Overhead Rate Based on Direct