In: Accounting
H Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year.
Estimated manufacturing overhead from the beginning of the year |
$ | 310,000 | |
Estimated activity level from the beginning of the year | 20,000 | machine-hours | |
Actual total fixed manufacturing overhead | $ | 338,000 | |
Actual activity level | 18,300 | machine-hours | |
The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.)
Multiple Choice
$283,650
$309,270
$28,000
$310,000
Working Notes: | ||||||
CACLULATION OF OVERHEAD APPLICATION RATE PER MAHCINE HOURS | ||||||
Overhead Application Rate = | Estimated Manufacturing Overhead | "/" | Estimated Machine Hours | "=" | Estimated Overhead rate PER Machine Hrs | |
Overhead Application Rate = | $ 3,10,000 | "/" | 20,000 | "=" | $ 15.50 | |
Solution: | ||||||
CALCULATION OF MAHCINE OVERHEAD APPLIED | ||||||
Actual Machine Overhead Worked | 18300 | Machine Hours | ||||
Multiply By | "X" By | |||||
Estimated Overhead rate Per Machine Hrs | $ 15.50 | |||||
Applied Overhead = | $ 2,83,650 | |||||
Answer = Option 1 = $ 283,650 | ||||||