QUIZ I_Before Mid Term Exam_21 Oct 2015_Marketing3A_BATCH 2

Voksel inc thinks machine hours is the best activity

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6. Voksel, 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? Predetermined overhead rate = Estimated or budgeted Annual Manufacturing Overhead Cost Estimated or budgeted Machine Hours Predetermined overhead rate = $2,050,000 : 20,000 machine hours = $102.5 per machine hour Applied Manufacturing Overhead Cost to Job B12 = 1000 machine hours x $102.5 = $102,500
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