Huang Aerospace Corporation manufactures aviation control panels in two departme

Question

Huang Aerospace Corporation manufactures aviation control panels in two departments, Fabrication and Assembly. In the Fabrication department, Huang uses a predetermined overhead rate of $30 per machine-hour. In the Assembly department, Huang uses a predetermined overhead rate of $12 per direct labor-hour. During the current year, Job #X2984 incurred the following number of hours in each department:


Machine-hours: Fabrication = 40, Assembly = 12
Direct labor-hours: Fabrication = 3, Assembly = 25

What is the total amount of manufacturing overhead that Huang should have applied to Job #X2984 during the current year?
$1,200
$1,500
$1,560
$1,734
must show work

Explanation / Answer

Since the Fabrication uses the machine hour as the allocation base, the total overhead applied to Fabrication is Overhead applied to Fabrication = Predetermined overhead rate * Actual machine hours charged to Fabrication = $30 * 40 = $1,200 Overhead applied to assemblye = Predetermined overhead rate * Actual Direct labor hours charged to Assembly = $12 * 25 = $300 Total manufacturing over applied to Job is $1,200 + $300 = $1,500 Therefore, the correct option is b) $1,500

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