Dutchik Company had no jobs in progress at the beginning of June and no beginnin
ID: 2395347 • Letter: D
Question
Dutchik Company had no jobs in progress at the beginning of June and no beginning inventories. It started only two jobs during the month - Job A and Job B. Job A was completed and sold by the end of June and Job B was incomplete at the end of June. The company uses a plantwide predetermined overhead rate based on machine hours. The following additional information is available for the company as a whole and for Jobs A and B (all data and questions relate to the month of June) Job A Job B Direct Materials $10,000 $7,000 Direct Labor $9,000 $5,400 Actual Direct labor hours worked 500 300 Actual machine hours used 380 85 Estimated variable manufacturing overhead per machine hour $13.00 Estimated total fixed manufacturing overhead $20,000 Estimated total direct labor hours to be worked 1,000 Estimated total machine hours to be used 500 Total actual manufacturing overhead costs incurred $38,000 How much manufacturing overhead was applied to JOB A?Explanation / Answer
Plant wide factory overhead rate = Total budgeted overheads/Budgeted machine hours
= $20,000÷500
= $40
Manufacturing overhead applied to JOB A:
= Machine for JOB A×Overhead rate per hour
= 380×$40
= $15,200
Hence, Manufacturing overhead applied to JOB A is $15,200.
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