Gerstein Corporation Uses a Job-Order Costing System with a Single

question 290

Multiple Choice

Gerstein 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 total fixed manufacturing overhead cost of $90,000, variable manufacturing overhead of $3.70 per direct labor-hour, and 50,000 direct labor-hours. The company recently completed Job M800 which required 150 direct labor-hours.The amount of overhead applied to Job M800 is closest to: (Round your intermediate calculations to 2 decimal places.)

• A) $270
• B) $1,380
• C) $825
• D) $555

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Definitions:

MACRS Tables

Depreciation schedules in the Modified Accelerated Cost Recovery System allowing for faster asset depreciation in the earlier years of the asset's life.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.

Double-Declining-Balance

A method of accelerated depreciation which doubles the normal depreciation rate.

Scrap Value

An estimated calculation of what an asset will be worth at the time it is sold, after it is no longer useful.