Fee The first step is to calculate the estimated total overhead costs in the two departments.
Machining
Customizing
The second step is to combine the estimated manufacturing overhead costs in the two departments ($44,400 + $21,200 = $65,600) to calculate the plantwide predetermined overhead rate as follow:
The overhead applied to Job C is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $6.56 per MH x (4,100 MHs + 1,600 MHs)
= $6.56 per MH x (5,700 MHs)
= $37,392
Job C's manufacturing cost:
Reference: CH02-Ref24
Prather 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 P513 was completed with the following characteristics:

-The predetermined overhead rate is closest to:
A) $13.30 per direct labor-hour
B) $3.80 per direct labor-hour
C) $9.50 per direct labor-hour
D) $5.70 per direct labor-hour

Question

Fee The first step is to calculate the estimated total overhead costs in the two departments.
Machining
  Customizing
  The second step is to combine the estimated manufacturing overhead costs in the two departments ($44,400 + $21,200 = $65,600) to calculate the plantwide predetermined overhead rate as follow:
  The overhead applied to Job C is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $6.56 per MH x (4,100 MHs + 1,600 MHs)
= $6.56 per MH x (5,700 MHs)
= $37,392
Job C's manufacturing cost:
  Reference: CH02-Ref24
Prather 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 P513 was completed with the following characteristics:
 
-The predetermined overhead rate is closest to:
A) $13.30 per direct labor-hour 
B) $3.80 per direct labor-hour 
C) $9.50 per direct labor-hour 
D) $5.70 per direct labor-hour

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) = $285,000 + ($3.80 per direct labor-hour × 50,000 direct labor-hours) = $285,000 + $190,000 = $475,000
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $475,000 ÷ 50,000 direct labor-hours = $9.50 per direct labor-hour

Fee the First Step Is to Calculate the Estimated Total