Morataya Corporation has two manufacturing departments--Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Assembly Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $39,200 $6,600 $45,800 Estimated variable manufacturing overhead cost - per MH $1.90 $2.10 During the most recent month, the company started and completed two jobs--Job B and Job G. There were no beginning inventories. Data concerning those two jobs follow: Job B Job G Direct materials $14,800 $8,300 Direct labor cost $22,000 $ 8,900 Machining machine-hours 4,800 2,200 Assembly machine-hours 1,200 1,800 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to:a) $4.00 b) $7.50 c) $4.58 d) $6.54

Question

Business

Karley Bolton

7 March, 09:21

Morataya Corporation has two manufacturing departments--Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Assembly Total Estimated total machine-hours (MHs) 7,000 3,000 10,000 Estimated total fixed manufacturing overhead cost $39,200 $6,600 $45,800 Estimated variable manufacturing overhead cost - per MH $1.90 $2.10 During the most recent month, the company started and completed two jobs--Job B and Job G. There were no beginning inventories. Data concerning those two jobs follow: Job B Job G Direct materials $14,800 $8,300 Direct labor cost $22,000 $ 8,900 Machining machine-hours 4,800 2,200 Assembly machine-hours 1,200 1,800 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to:a) $4.00 b) $7.50 c) $4.58 d) $6.54

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Answers (1)

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Claudia Tanner · Answer 1

The correct answer is C.

Explanation:

Giving the following information:

Total Estimated total machine-hours (MHs) 10,000

Estimated total fixed manufacturing overhead cost = $45,800

Total Estimated variable manufacturing overhead cost - per MH = $1.90 + $2.10 = $4

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

Estimated FIXED manufacturing overhead rate = (45,800/10,000) = $4.58