Question
The question is incomplete, hence the tutor added a piece of information
The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. What amount would be
Assuming the actual machine hours worked is 3,500
<em>Note the actual machine was added by the tutor</em>
Answer:
Applied overhead =$49,000
Explanation:
<em>Overheads are charged to units produced by the means of an estimated overhead absorption rate. This rate is computed using budgeted overhead and budgeted activity level. </em>
<em>Pre-determined overhead absorption rate (POAR) = Budgeted overhead/Budgeted machine hours</em>
The POAR is given as $14 per machine hour
Applied (absorbed) overhead = POAR × Actual machine hours
Applied overhead = $14 × 3,500 =$49000
Applied overhead =$49,000
