Harootunian Corporation uses a job-order costing system with a single plantwide

Question

Harootunian Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours 80,000 Total fixed manufacturing overhead cost $ 312,000 Variable manufacturing overhead per machine-hour $ 2.10 Recently, Job T629 was completed with the following characteristics: Number of units in the job 50 Total machine-hours 200 The amount of overhead applied to Job T629 is closest to: Select one: a. $1,200 b. $1,620 c. $420 d. $780

Explanation / Answer

Amount of total overhead applied=Fixed+Variable

=312000+(2.1*80000)=480000

Predetermined overhead rate=Total overhead/total machien hours

=480000/80000=6

Overhead applied= Predetermined rate*no of machine hpours

=6*200=1200

It is option A

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