Washburn Company produces earbuds. During the tear, manufacturing overhead costs are estimated to be $200,000. Estimated machine usage is 2,500 hours. The company assigns overhead based on machine hours. Job No. 551 used 90 machine hours . Compute the predetermined overhead rate, determine the amount of overhead to apply to Job No. 551, and prepare the entry to apply overhead to Job No. 551 on January 15.

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facundobuzzetti facundobuzzetti · Answer 1 · 2021-02-13T01:20:08+01:00

Answer:

Results are below.

Explanation:

First, we need to calculate the predetermined overhead rate:

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

Predetermined manufacturing overhead rate= 200,000 / 2,500

Predetermined manufacturing overhead rate= $80 per machine hour

Now, we can allocate overhead to Job 551:

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

Allocated MOH= 80*90

Allocated MOH= $7,200

Finally, the entry to record the allocation:

Work in process inventory 7,200

Manufacturing overhead (apply Job 551) 7,200