Question

22. Huxtable charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of machine hours. The following data pertain to the current year: Budgeted manufacturing overhead: $480,000 Actual manufacturing overhead: $440,000 Budgeted machine hours: 20,000 Actual machine hours: 16,000 Overhead applied to production totaled: * (3 Points) some other amount $550.000 $600,000 $352.000 $384.000 73 Simone uses a predetermined overhead application rate of $8 per direct labor hour. A review of

Answer 1

Answer)

Calculation of total overheads applied to production

Total overheads applied to production = Actual machine hours consumed X Predetermined overhead rate per machine hour

                                                                          = 16,000 machine hours X $ 24 per machine hour

                                                                           = $ 384,000

Therefore total overheads applied to production are $ 384,000.

Working Note:

Calculation of predetermined overhead rate

Predetermined overhead rate = Budgeted manufacturing overhead/ Budgeted machine hours

                                                        = $ 480,000/ 20,000 machine hours

                                                         = $ 24 per machine hour

Therefore predetermined overhead rate is $ 24 per machine hour.