Macnamara Corporation has two manufacturing departments--Casting and Finishing.

Question

Macnamara Corporation has two manufacturing departments--Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:

During the most recent month, the company started and completed two jobs--Job F and Job M. There were no beginning inventories. Data concerning those two jobs follow:

Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job F is closest to:

Multiple Choice

$4,620

$12,780

$12,420

$8,160

Casting Finishing Total Estimated total machine-hours (MHs) 1,000 4,000 5,000 Estimated total fixed manufacturing overhead cost $ 4,800 $ 8,800 $ 13,600 Estimated variable manufacturing overhead cost per MH $ 1.80 $ 2.90

Explanation / Answer

Departmental predetermined overhead rates: Casting 6.6 =1.8+(4800/1000) Finishing 5.1 =2.9+(8800/4000) Manufacturing overhead applied to Job F = (700*6.6)+(1600*5.1)= $12780

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