Question

Pell Corporation manufactures computers. Assume that Pell allocates manufacturing overhead based on machine hours estimated 10,000 machine hours and exist 87,000 of manufacturing overhead costs actually used 16,000 machine hours and incurred the following actual costs: (Click the icon to view the costs.) What is Pell's actual manufacturing overhead cost?
A. exist 149,000
B. exist 157,000
C. exist 85,000
D. exist 221,000

Answer 1

Answer:

exist 139,200

Explanation:

Assume that Pell allocates manufacturing overhead based on machine hours, estimated 10,000 machine hours and exist 87,000 that implies that the standard cost per machine hour = exist 87,000 / 10,000 = 8.7 exist

Therefore the manufacturing overhead costs if Pell actually used 16,000 machine hours will be: 16000 x 8.7 = exist 139,200