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6 March, 05:31

Prather Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following dа ta: Total direct labor-hours 50,000 Total fixed manufacturing overhead cost $ 285,000 Variable manufacturing overhead per direct labor-hour $ 3.80 Recently, Job P513 was completed with the following characteristics: Number of units in the job 10 Total direct labor-hours 20 Direct materials $ 710 Direct labor cost $ 500 The amount of overhead applied to Job P513 is closest to:

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  1. 6 March, 05:46
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    Allocated MOH = $114

    Explanation:

    Giving the following information:

    Total direct labor-hours 50,000

    Total fixed manufacturing overhead cost $ 285,000

    Variable manufacturing overhead per direct labor-hour $3.80

    Job P513:

    Total direct labor-hours 20

    First, we need to calculate the estimated overhead rate:

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

    Estimated manufacturing overhead rate = 285,000/50,000

    Estimated manufacturing overhead rate = $5.7 per direct labor hour

    Now, we can determine the allocated overhead to Job P513:

    Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

    Allocated MOH = 5.7*20

    Allocated MOH = $114
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