QS 27 Applying overhead LO P3 At the beginning of the year a

QS 2-7 Applying overhead LO P3 At the beginning of the year, a company predicts total overhead costs of $560,000. The company applies overhead using uses 13 machine hours during January? machine use 1.400 machine hours during the year. What amount of overhead should be applied to Job 65A if that job ed to Job 65A P 2 of 4 Next AEp

Solution

Answer

Overhead rate per machine hour = Estimated Overhead Cost / Estimated machine hours

= $560,000 / 1,400 Machine hours

Overhead rate = $400 per machine hour

Overhead applied to Job 65A = 13 Machine Hours * $400 per machine hour

Overhead applied to Job 65A = $5,200