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vektek, inc. thinks machine hours is the best activity base for its manufacturing overhead. the estimate of annual overhead costs for its jobs was $820,000. the company used 1,000 hours of processing on job no. b12 during the period and incurred overhead costs totaling $840,000. the budgeted machine hours for the year totaled 20,000. how much overhead should be applied to job no. b12? group of answer choices $840 $41,000 $42,000 $820

Answer :

Aamirmajeed5100go

Overheads should be applied to job no. b12 is $41,000.

Overhead rate is the ratio of indirect costs to direct costs, expressed as a percentage, that is used to calculate the total cost of a product or service. It is typically calculated by dividing all indirect costs associated with a project by the total cost of direct labor hours or materials.

Calculate the overhead rate by dividing the total estimated overhead costs by the total budgeted machine hours.

O/H rate = $820,000 Ă· 20,000 hours = $41 per machine hour

Step 2: Calculate the overhead to be applied to job no. b12 by multiplying the overhead rate by the actual machine hours used.

O/H to be applied to job no. b12 = $41 x 1,000 hours = $41,000

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