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Manchester Ltd

Question 61

Essay

Manchester Ltd. uses a job-order costing system and a predetermined overhead rate based on machine hours.
At the beginning of the year, the company estimated manufacturing overhead for the year would be £135,000 and 9,000 machine hours would be used.
The following information pertains to December of the current year:
Actual manufacturing overhead costs incurred in December were £31,000.
Required:
Manchester Ltd. uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing overhead for the year would be £135,000 and 9,000 machine hours would be used. The following information pertains to December of the current year: Actual manufacturing overhead costs incurred in December were £31,000. Required:     a. Compute the predetermined overhead application rate. b. Determine the total cost associated with each job.
a.
Compute the predetermined overhead application rate.
b.
Determine the total cost associated with each job.

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