# John Sheng, a cost accountant at Starlet Company, is developing departmental factory overhead application rates for the company’s Tooling and Fabricating departments. The budgeted overhead for each department and the data for one job are as follows: Using the departmental overhead application rates, total overhead applied to Job 231 in the Tooling and Fabricating departments will be: a. $225. b.$303. c. $537. d.$671.

### Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

### Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

#### Solutions

Chapter
Section
Chapter 16, Problem 2CMA
Textbook Problem

## John Sheng, a cost accountant at Starlet Company, is developing departmental factory overhead application rates for the company’s Tooling and Fabricating departments. The budgeted overhead for each department and the data for one job are as follows:Using the departmental overhead application rates, total overhead applied to Job 231 in the Tooling and Fabricating departments will be: a. $225. b.$303. c. $537. d.$671.

Expert Solution
To determine

Determine the amount of total overhead applied to Job 231 in the tooling and fabricating departments.

### Explanation of Solution

Factory overhead costs are applied or allocated to cost of job based on predetermined factory overhead rate.

Calculate the tooling overhead per hour.

Tooling overhead per hour = Total budgeted overheadTotal direct labor hours=$8,625460=$18.75

Calculate the fabricating overhead per hour.

Fabricating overhead per hour = Total budgeted overheadTotal direct labor hours=$16,120620=$26

Calculate the amount of total overhead applied to Job 231

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