Question

Green Company expected to incur $ 10 comma 500 in manufacturing overhead costs and use 5 comma 000 machine hours for the year. Actual manufacturing overhead was $ 9 comma 800 and the company used 5 comma 300 machine hours. 9. Calculate the predetermined overhead allocation rate using machine hours as the allocation base. 10. How much manufacturing overhead was allocated during the​ year?

Answer 1

Answer:

Estimated manufacturing overhead rate= 10,500/5,000= $2.1 per machine hour

Allocated MOH= $11,130

Explanation:

Giving the following information:

Estimated overhead costs= $10,500

Estimated machine-hours= 5,000

Actual machine-hours= 5,300 machine hours.

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 10,500/5,000= $2.1 per machine hour

Now, we can allocate overhead based on actual machine-hours:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 2.1*5,300= $11,130