Question

Xerox Corporation is using a predetermined overhead rate of $22.30 per machine-hour that was based on estimated total fixed manufacturing overhead of $446,000 and 20,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $409,000 and 18,200 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to:

Answer 1

Answer:

$405,860

Explanation:

Data given

Predetermined overhead rate = $22.30

Actual machine hours  = $18,200

The computation of manufacturing overhead applied is shown below:-

Manufacturing overhead applied = Predetermined overhead rate × Actual machine hours

= $22.30 × 182,00

= $405,860

Therefore for computing the manufacturing overhead applied we simply multiplied the predetermined overhead rate with actual machine hours.