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Meenach 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 54,000 direct labor-hours, total fixed manufacturing overhead cost of $54,000, and a variable manufacturing overhead rate of $2.40 per direct labor-hour. Recently Job X387 was completed and required 210 direct labor-hours.
Required:
Calculate the amount of overhead applied to Job X387. (Do not round intermediate calculations.)

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Answer:

Applied overhead   = $714

Explanation:

The total overhead to applied to Job X387 is the sum of the fixed overhead and the variable overhead to be applied.

Fixed overhead rate per hour = $54,000/54,000 labour hour

                                              = $1 per hour

Variable overhead rate = $2.40 per labour hour

Applied overhead

Variable overhead=  $2.40 × 210= 504

Fixed overhead     = $1× 210=          210

Overhead                                           714

Applied overhead   = $714

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