Walsh Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.50 per direct labor-hour, and 30,000 direct labor-hours. The company has provided the following data concerning Job A477which was recently completed: Total direct labor-hours 100 Direct materials $520 $ 2,800 Direct labor cost The amount of overhead applied to Job A477 is closest to: Select one: a. $650 b. $350 c. $1,000 d. $300

Question

Dennis Huerta

Business

12 October, 13:00

Walsh Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.50 per direct labor-hour, and 30,000 direct labor-hours. The company has provided the following data concerning Job A477which was recently completed: Total direct labor-hours 100 Direct materials $520 $ 2,800 Direct labor cost The amount of overhead applied to Job A477 is closest to: Select one: a. $650 b. $350 c. $1,000 d. $300

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Answers (1)

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Ariana Walters · Answer 1

a. $650

Explanation:

The computation of amount of overhead is shown below:-

Total variable manufacturing overhead = per direct labor-hour * direct labor-hours

= $3.5 * 30,000

= $105,000

Total manufacturing overhead = Total variable manufacturing overhead + Total fixed manufacturing overhead cost

= $105,000 + $90,000

= $195,000

Predetermined overhead rate = Total manufacturing overhead : direct labor-hours

= $195,000 : $30,000

= $6.5

Amount of overhead applied to Job A477 = Total direct labor-hours * Predetermined overhead rate

= 100 * $6.5

= $650