Carradine Corporation uses a job-order costing system with a single plantwide pr
ID: 2329675 • Letter: C
Question
Carradine 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 $105,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. The company recently completed Job P233 which required 60 machine-hours. The amount of overhead applied to Job P233 is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $90 $270 $450 $180
Explanation / Answer
Total variable overhead estimated=($3/machine hour*70000)=$210,000
Hence total overhead estimated=(Fixed overhead+Variable overhead)
=(105000+210,000)=$315000
Hence predetermined overhead rate=total overhead estimated/Total machine hours estimated
=(315000/70000)=$4.5/machine hour
Hence appied overhead=predetermined overhead rate*60 machine hours
=$4.5/machine hour*60 machine hours
=$270.