Olympia Manufacturing Uses a Predetermined Overhead Allocation Rate Based on a Percentage

question 51

Multiple Choice

Olympia Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost.At the beginning of the year,Olympia estimated total manufacturing overhead costs at $1,010,000 and total direct labor costs at $830,000.In June,Job 511 was completed.The details of Job 511 are shown below. $$\begin{array} { | l | r | } \hline \text { Direct materials cost } & \$ 26,500 \\\hline \text { Direct labor cost } & \$ 11,000 \\\hline \text { Direct labor hours } & 400 \text { hours } \\\hline \text { Units of product produced } & 300 \text { hours } \\\hline\end{array}$$ What is the amount of manufacturing overhead costs allocated to Job 511? (Round any percentages to two decimal places and your final answer to the nearest dollar. )

• A)$13,386
• B)$32,247
• C)$9,040
• D)$21,777

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Definitions:

Accounts Payable

Amounts owed to creditors that result from the purchase of goods or services on account—a liability.

Source Documents

Documents that provide evidence of a business's transactions, such as invoices, contracts, or receipts.

General Journal Entries

The records of financial transactions in the chronological order in which they occur, used as a preliminary step in building the company's financial statements.

Raw Materials

The basic materials that are used in the manufacturing process to create finished goods.