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pickupchik [31]
3 years ago
15

Instant Access Services Inc. leases access to high-speed computers to small businesses. It provides the following information fo

r the year:
Budgeted

Actual

Overhead cost $2,100,000 $1,900,000
Computer hours 100,000 90,000
Direct labor hours 200,000 180,000
Overhead is applied on the basis of computer hours.

(A) Compute the predetermined overhead rate.

$____________

(B)Determine the amount of overhead applied for the year.

$___________
Business
1 answer:
Afina-wow [57]3 years ago
5 0

Answer:

a. $21

b. $1,890,000

Explanation:

a. The computation of the predetermined overhead rate is shown below:

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated  computer hours)

= $2,100,000 ÷ 100,000 hours

= $21

b. Now the applied overhead which equals to

= Actual computer hours  × predetermined overhead rate

= 90,000 hours × $21

= $1,890,000

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