Happy Clicks, Inc. uses a predetermined overhead allocation rate of $5.75 per ma

Question

Happy Clicks, Inc. uses a predetermined overhead allocation rate of $5.75 per machine hour. Actual overhead costs incurred during the year are as follows: Indirect materials ndirect labor Plant depreciation Plant utilities and insurance Other plant overhead costs Total machine hours used during year $5,600 $2,900 $41 $10,000 $12,700 7,000 hours What is the amount of manufacturing overhead cost allocated to Work-n - Process Inventory during the year? OA. $38,241 OB. $29,741 Oc. $40,250 O D. $8,500

Explanation / Answer

The correct option is (c) i.e. $40,250

Amount of manufacturing overhead cost allocated to Work-in-Process Inventory = (5.75*7,000) = $40,250

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