Note: It is recommended that you save your response as you complete each questio

Question

Note: It is recommended that you save your response as you complete each question. Question 18 (1 point) Vektek, Inc. thinks machine hours is the best activity base for its manufacturing overhead. The estimate of annual overhead costs for its jobs was $2,050,000. The company used 1,000 hours of processing on Job No. B12 during the period and incurred overhead costs totaling $2,100,000. The budgeted machine hours for the year totaled 20,000. How much overhead should be applied to Job No. B12? 1) $2,050 2) $2,100 3) $105,000 4) $102,500

Explanation / Answer

Solution: Answer is 4th option $102,500 Working Notes: Predetermined OH rate =Budgeted OH cost / Budgeted machine hours for the year =$2,050,000/20,000 $102.50 per machine hour Overhead should be applied to Job No. B12 = Machine hours used on the Job no. B12 x Predetermined OH rate per budgeted machine hours =1000 x 102.50 =$102,500 Please feel free to ask if anything about above solution in comment section of the question.

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