Jeremy Corporation estimated manufacturing overhead costs for the year to be $540,000. Jeremy also estimated 9000 machine hours and 2000 direct labor hours for the year. It bases the predetermined overhead allocation rate on machine hours. On January 31, Job 25 was completed. It required 6 machine hours and 4 direct labor hours. What is the amount of manufacturing overhead allocated to the completed job? (Round intermediate calculations to the nearest cent and your final answer to the nearest dollar.)
A) $60
B) $600
C) $360
D) $1620
C) $360
Explanation: Predetermined overhead allocation rate = Total estimated overhead costs / Total estimated quantity of the overhead allocation base
Predetermined overhead allocation rate = $540,000 / 9000 machine hours = $60.00 per machine hour
Allocated manufacturing overhead cost = Predetermined overhead allocation rate × Actual quantity of the allocation base used by each job
Allocated manufacturing overhead cost = $60.00 × 6 machine hours = $360
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