Question

Fusaro 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 total fixed manufacturing overhead from the beginning of the year $ 684,000 Estimated activity level from the beginning of the year 40,000 machine-hours Actual total fixed manufacturing overhead $ 616,000 Actual activity level 37,700 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.)

Answer 1

Answer:

The amount of manufacturing overhead that would have been applied to all jobs during the period is $1,289,340.00

Explanation:

For computing the manufacturing overhead, first, we have to compute the predetermined overhead rate which is shown below:

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours)

= $684,000 ÷ 20,000 hours

= $34.20

Now the applied overhead would be equal to

=  Actual direct labor-hours × predetermined overhead rate

= 37,700 hours × $34.20

= $1,289,340.00