 Business
27 August, 08:45

# Chelsea, Inc. uses the job costing method and uses direct labor hours as the allocation base. In 2016, the total estimated and actual overhead costs for Job 3489 were \$250,000 and \$275,000, respectively. The total estimated and actual direct labor hours for Job 3489 were 25,000 and 28,000, respectively. Which of the following represents the MOH allocated to Job 3489?1. Predetermined MOH rate = total estimated manufacturing overhead costs / total estimated amount of the allocation base2. \$250,000 / 25,000 DLH = \$103. MOH allocated to job = predetermined MOH rate * actual amount of allocation base used by the job4. \$10 * 28,000 DLH = \$280,000

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1. 27 August, 10:38
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3. MOH allocated to job = predetermined MOH rate * actual amount of allocation base used by the job

Explanation:

3. MOH allocated to job = predetermined MOH rate * actual amount of allocation base used by the job

The predetermined overhead rate is used to apply manufacturing overhead costs to production jobs. the quantity of a cost driver required by a particular job is multiplied by a predetermined overhead rate to determine the amount of overhead cost applied to the job.