# Calculation of Manufacturing Overhead Allocation

Question

XYZ Inc. uses machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to various jobs. XYZ budgets that it will incur the following amounts during the year: \$25,000 in direct materials, \$5,000 in direct manufacturing labor, \$20,000 in manufacturing overhead, and 50,000 machine hours.

During the year, XYZ works on Job #24 and incurs the following actual costs/usages for Job #24: \$500 in direct materials, \$100 in direct labor, and 800 machine hours are used.

REQUIRED:

1. Determine XYZ’s manufacturing overhead allocation rate.
2. Determine the amount of manufacturing overhead allocated to Job #24.
3. Determine the total cost of Job #24.
4. Prepare any journal entries necessary to account for the direct materials used, direct labor used, and the overhead allocated to Job #24. Assume XYZ pays its employees cash for their services.

Total Word Count 104

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