The Management of Featheringham Corporation Would Like to Investigate the Possibility

question 221

Multiple Choice

The management of Featheringham Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity. The company's controller has provided an example to illustrate how this new system would work. In this example, the allocation base is machine-hours and the estimated amount of the allocation base for the upcoming year is 58,400 machine-hours. Capacity is 71,400 machine-hours and the actual level of activity for the year is assumed to be 55,400 machine-hours. All of the manufacturing overhead is fixed and both the estimated amount at the beginning of the year and the actual amount at the end of the year are assumed to be $2,836,008 per year. It is assumed that a number of jobs were worked on during the year, one of which was Job Z77W which required 340 machine-hours.If the company bases its predetermined overhead rate on capacity, then the amount of manufacturing overhead charged to job Z77W is closest to:

• A) $13,504.80
• B) $16,799.40
• C) $17,744.95
• D) $17,405.10

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Definitions:

Acid Stain

A coloring technique used in microscopy to identify and differentiate among various types of cells and tissues, often using acidic dyes.

Rose-colored Stain

A dye or staining method used in microbiology to highlight structures in microbial and human cells.

WBC

White Blood Cells; the cells of the immune system that are involved in protecting the body against both infectious disease and foreign invaders.

Hereditary Blood Disease

A genetic disorder affecting the blood, passed from parents to offspring.