Answer:
$ 97,500
Explanation:
Data provided:
The estimate of annual overhead costs for jobs = $ 1,950,000
Number of hours used for the Job No. B12 = 1000 hours
Total overhead costs incurred = $ 2,000,000
Total budgeted machine hours for the year = 20000
Now,
The overhead application rate is calculated as:
= (estimate of annual overhead costs)/(Total budgeted machine hours for the year)
on substituting the values, we get
The overhead application rate = $ 1,950,000 / 20000 = $ 97.5 / hr
Therefore, for 1000 hours of processing
total overhead applied = The overhead application rate × 1000
or
Overhead to be applied to Job No. B12 = $ 97.5 / hr × 1000 = $ 97,500
