Answer:
Allocated overhead= $28,780
Explanation:
Giving the following information:
Machining Finishing Total
Estimated total machine-hours (MHs) 5,000 5,000
Estimated total fixed manufacturing overhead cost $26,500 $13,500
Estimated variable manufacturing overhead cost per MH $2 $3
Job L
Machining machine-hours 1,600
Finishing machine-hours 3,000
First, we need to calculate the predetermined overhead rate for each department:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machinning= (26,500/5,000) + 2 = $7.3 per machine hour
Finishing= (13,500/5,000) + 3 = $5.7 per machine-hour
Now, we can allocate overhead for Job L:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated overhead= 1,600*7.3 + 3,000*5.7
Allocated overhead= $28,780