Question

At the beginning of the year, Scaled Manufacturing estimates annual overhead costs tobe $1,200,000 and that 300,000 machine hours will be operated. Using machine hours asa base, the amount of overhead applied during the year if actual machine hours for theyear was 315,000 hours is

Answer 1

Answer:

Manufacturing overhead allocated= $1,260,000

Explanation:

Giving the following information:

Scaled Manufacturing estimates annual overhead costs to be $1,200,000 and that 300,000 machine hours will be operated. Using machine hours as a base.

The actual machine hours for the year were 315,000 hours.

We need to find the overhead applied. First, we need to determine the overhead rate.

Overhead rate= total estimated overhead for the period/ total amount of allocation base

Overhead rate= 1200000/300000= $4 per hour

Manufacturing overhead allocated= 315000 hours* 4= $1,260,000