Question

Acton Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $132,600 Estimated machine-hours 1,700 Actual manufacturing overhead $124,100 Actual machine-hours 1,600 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. The overhead for the year was:

Answer 1

answers

the predetermined overhead rate = $78

the overhead for the year was overapplies by $700

explanation

estimated manufacturing overhead = 132,600

estimated machine hours= 1700 hours

actual manufacturing overhead = 124,100

actual machine hours=1600 hours

so

predetermined OH rate = estimated manufacturing overhead/estimated machine hours

=$132,600/1700 hours

=$78

applied manufacturing overhead = predetermined OH rate * actual machine hours

= $78*1600

=$124,800

here applied manufacturing OH is > actual manufacturing OH

$124,800 > $124,100

so $700 is the amount of overapplied manufacturing cost