Carradine Corporation uses a job-order costing system with a single plantwide pr
ID: 2601140 • 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.)
Garrison 16e Rechecks 2017-06-28
Multiple Choice
$270
$180
$90
$450
Explanation / Answer
Fixed manufacturing overhead rate = 105000/70000 = 1.5 per machine hour
variable manufacturing overhead rate = 3 per machine hour
Total manufacturing overhead rate = (3+1.5) = 4.5 per machine hour
Amount of overhead applied to job P233 is closest = (60*4.5) = 270
so answer is a) $270