Question

Bonita Company assigns overhead based on machine hours. The Milling Department logs 2350 machine hours and Cutting Department shows 3990 machine hours for the period. If the overhead rate is $7 per machine hour, the entry to assign overhead will show a _______.

Answer 1

Explanation:

The computation of the overhead amount is shown below:

= (Milling department machine hours + cutting department machine hours) × overhead rate per machine hour

= (2,350 machine hours + 3,990 machine hours) × $7

= 6,340 machine hours × $7

= $44,380

So for assigning the overhead cost we have to credited the manufacturing overhead for $44,380