The Grainger Corporation bases its predetermined overhead rate on the expected level of activity - 49,000 machine hours. The controller has suggested an alternative calculation that bases the overhead rate on the maximum capacity level - 54,000 machine hours. Using the maximum capacity level as the base normally results in underapplied overhead that can be interpreted as an estimate of the cost of idle resources (sometimes referred to as excess capacity). In order to comply with GAAP, the under-applied overhead balance would have to be assigned to products with an adjusting entry before the books are closed. Assume the actual level of activity for the year is 46,900 machine-hours. To simplify the calculations assume that the actual and estimated manufacturing overhead equals $1,323,000 per year and that all of these costs are fixed. During the year one of the products worked on was Job SUA-600. This job required 45 machine-hours. Determine how much overhead would be applied to Job SUA-600 if the predetermined overhead rate is based on the amount of the allocation base at (maximum) capacity. (Round to the nearest $1.00)

The Grainger Corporation bases its predetermined overhead rate on the expected level of activity - 49,000 machine hours. The controller has suggested an alternative calculation that bases the overhead rate on the maximum capacity level - 54,000 machine hours. Using the maximum capacity level as the base normally results in underapplied overhead that can be interpreted as an estimate of the cost of idle resources (sometimes referred to as excess capacity). In order to comply with GAAP, the under-applied overhead balance would have to be assigned to products with an adjusting entry before the books are closed. Assume the actual level of activity for the year is 46,900 machine-hours. To simplify the calculations assume that the actual and estimated manufacturing overhead equals $1,323,000 per year and that all of these costs are fixed. During the year one of the products worked on was Job SUA-600. This job required 45 machine-hours. Determine how much overhead would be applied to Job SUA-600 if the predetermined overhead rate is based on estimated amount of the allocation base. (Round to the nearest $1.00)