Sybil,IncUses a Predetermined Overhead Allocation Rate to Allocate Manufacturing Overhead

question 7

Multiple Choice

Sybil,Inc.uses a predetermined overhead allocation rate to allocate manufacturing overhead costs to jobs.The company recently completed Job 300X.This job used 10 machine hours and 3 direct labor hours.The predetermined overhead allocation rate is calculated to be $45 per machine hour.What is the amount of manufacturing overhead allocated to Job 300X using machine hours as the allocation base?

• A) $450
• B) $135
• C) $585
• D) $315

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Definitions:

Weighted-Average Method

A cost accounting technique used to allocate costs to inventory and cost of goods sold, averaging the costs of goods available for sale and assigning them to the units sold and remaining inventory.

Work in Process Inventory

The total cost of unfinished goods currently in production, including material, labor, and overhead.

Process Costing System

An accounting method used in industries where production is continuous, calculating the cost of a product at various stages of the manufacturing process.

Homogeneous Product

A product that is uniform in quality and interchangeable with products of the same type from different producers.