Kostelnik 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 total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. the company has provided the following data concerning job a496 which was recently completed:

number of units in the job 20
total machine hours 80
direct materials $500
direct labor cost $2,160

the amount of overhead applied to job a496 is closes to
(a) $1,256
(b) $632
(c) $944
(d) $312

The correct answer is C: $944

Explanation:

Giving the following information:

Single plantwide predetermined overhead rate based on machine-hours. Total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours.

First, we need to determine the manufacturing overhead rate:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base= (237000/30000)+3.9= $11.8 per machine hour.

Now, we can calculate the allocated overhead:

allocated overhead= Estimated manufacturing overhead rate* actual amount of allocation base= 11.8*80= $944

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