Macnamara Corporation has two manufacturing departmentsCasti

Macnamara Corporation has two manufacturing departments--Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:

During the most recent month, the company started and completed two jobs--Job F and Job M. There were no beginning inventories. Data concerning those two jobs follow:

Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job F is closest to:

Multiple Choice

$4,620

$12,780

$12,420

$8,160

	Casting	Finishing	Total
Estimated total machine-hours (MHs)		1,000		4,000		5,000
Estimated total fixed manufacturing overhead cost	$	4,800	$	8,800	$	13,600
Estimated variable manufacturing overhead cost per MH	$	1.80	$	2.90

Solution

Departmental predetermined overhead rates: Casting 6.6 =1.8+(4800/1000) Finishing 5.1 =2.9+(8800/4000) Manufacturing overhead applied to Job F = (700*6.6)+(1600*5.1)= $12780