Smarty Pants Corporation manufactures high end custom batches of designer pant suits. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 612 are as follows: $5,500 Direct materials used Direct labor hours worked Machine hours used Direct labor rate per hour Predetermined overhead rate based on machine hours $18 6 What amount of manufacturing overhead would be allocated to Job 612? B. $5,500 O C. $8,480

Question

Business

Lorenzo Wood

14 November, 13:58

Smarty Pants Corporation manufactures high end custom batches of designer pant suits. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 612 are as follows: $5,500 Direct materials used Direct labor hours worked Machine hours used Direct labor rate per hour Predetermined overhead rate based on machine hours $18 6 What amount of manufacturing overhead would be allocated to Job 612? B. $5,500 O C. $8,480

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Answers (1)

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Kristian Preston · Answer 1

C. $8,480

Explanation:

The following information is missing in the question:

Direct materials used $5,500

Direct labor hours worked 370

Machine hours used 530

Direct labor rate per hour $18

Predetermined overhead rate based on machine hour $16

The computation is shown below:

Manufacturing overhead allocated = Predetermined overhead rate * Machine hours used

= $16 * 530 machine hours used

= $8,480

Simply we multiplied the predetermined overhead rate with the Machine hours used so that the accurate amount could be computed

All other information which is given is not relevant. Hence, ignored it