26. Manufacturing Overhead Allocation Base and Calculating the Cost of Jobs. Brenner Company expects to incur $3,000,000 in manufacturing overhead costs this year. During the year, it expects to use 50,000 direct labor hours at a cost of $600,000 and 80,000 machine hours. Required: a. Prepare a predetermined overhead rate based on direct labor hours, direct labor cost, and machine hours. b. Why might Brenner Company prefer to use machine hours to allocate manufacturing overhead? c Using each of the predetermined overhead rates calculated in part a and the data that follows for job 128, determine the cost of job 128. Direct materials $6,000 Direct labor $4,000 (200 hours at $15 per hour)+(100 hours at $10 per hour) Machine time 700 hours B 26. Manufacturing Overhead Allocation Base and Calculating the Cost of Jobs a. The predetermined overhead rate is calculated as follows: Predetermined overhead rate Using Direct Labor Hours: estimated overhead costs direct labor hours per direct labor hour Using Direct Labor Costs: estimated overhead costs direct labor costs per direct labor dollar cost (or % of direct labor cost) Using Machine Hours: estimated overhead costs machine hours per machine hour b. Brenner might prefer to use machine hours since it is more accurate to allocate the manufac overheads on machine hours used. c. 3 0 1 2 Three different cost calculations are required: Direct Labor Hours Direct materials Direct labor Manufacturing overhead Total cost of Job 128 Direct Labor Cost Machine Hours -3 14 5 16 48 319