Sagnik B.

asked • 01/14/15

estimated manufacturing overhead question cost accounting need help tonight!, will give best rating, upvotes!

The Turquoise Company uses predetermined overhead to apply manufacturing overhead to jobs. The predetermined overhead is based on labor cost in Department A and machine hours in Department B. At the beginning of the year , the company made the following estimates :
 
Department A
Direct Labor Cost : $65,000
Manufacturing Overhead : $91,000
Direct Labor Hours : 8,000
Machine Hours : 3,000
 
Department B
Direct Labor Cost : $42,000
Manufacturing Overhead : $48,000
Direct Labor Hours : 10,000
Machine Hours : 12,000
 
They recently received an order for a job from a company in Vermont . The expected cost of the job is :
 
Department A 
Direct Labor Cost : $7,000
Direct Labor Hours : 500
Machine Hours : 100
 
Department B :
Direct Labor Cost : $3,500
Direct Labor Hours : 600
Machine Hours : 435
 
Question : What is the estimated overhead cost for the job ?
 
A) $1,737.50 B) $5,038.75 C) $7,400 D) $11,540.00 E) None of above
 
Please show help with steps. Thanks.

1 Expert Answer

By:

Sanjay S. answered • 01/15/15

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4.9 (34)

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Sagnik B.

This was great I will give you best answer after you answer one question for me ( I say that politely, sir). In B, I notice we multiply by machine hrs (435), how come in A we do not multiply by labor hours, but instead we multiply by labor cost ?
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01/15/15

Sagnik B.

never mind stupid question, I misread what I WROTE.... sorry.
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01/15/15

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