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GuDViN [60]
3 years ago
11

Rist Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporat

ion estimated that it would incur $255,000 in manufacturing overhead during the year and that it would work 100,000 machine-hours. The Corporation actually worked 105,000 machine-hours and incurred $270,000 in manufacturing overhead costs. By how much was manufacturing overhead underapplied or overapplied for the year? (Round your intermediate calculations to 2 decimal places.)
Business
1 answer:
Vladimir [108]3 years ago
4 0

Answer:

underapplied by 2,250

Explanation:

\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate

we will distribute the expected cost of overhead  ovwer the cost driver. In this case, machine hours:

255,000 / 100,000 = 2.55

Then we multiply thew rate by the amount of actual hours:

105,000 x 2.55 = 267,760

We compare with the appleid overhead:

267,760 - 270,000 = -2,250

As the actual overehad was higher than applied overhead the overhead was underapplied

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