Burton Company uses a normal costing system. The company uses direct labor-hours as the cost-allocation base. The following information is available for the company: Budgeted manufacturing overhead costs $2,000 Budgeted labor hours 800 Actual manufacturing overhead costs $1,500 Actual labor hours 500 Calculate the allocated direct manufacturing overhead costs of Job 56 if 10 direct-labor hours were used for the job.

the allocated direct manufacturing overhead costs of Job 56 is $25

Explanation:

Overheads in manufacturing process are allocated to jobs or products using cost drivers or surrogates.

First Step : Determine the Pre-determined Overhead rate

Pre-determined Overhead rate = Budgeted Overheads / Budgeted Activity

                                                    = $2,000 / 800

                                                    = $ 2.50 per labor hour

Step 2 : Determined the Amount of Overhead allocated to Job 56 based on labor hours utilised

Overhead for Job 56 = Pre-determined Overhead rate × Hours Used

                                     = $ 2.50 × 10

                                     = $25

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whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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