Thrall Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data:
Recently Job K125 was completed and required 160 machine-hours.
Required:
Calculate the amount of overhead applied to Job K125.
Definitions:
Sunk Cost
A cost that has already been incurred and cannot be removed and therefore should not be considered in an investment decision.
Straight-Line Depreciation
A method of allocating an asset's cost evenly over its useful life, resulting in a consistent depreciation expense each year.
Operating Costs
Expenses associated with the day-to-day functions of a business, excluding costs related to production or acquisition of goods.
Rate of Return
The percentage gain or loss on an investment over a specified time period.
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