Duggan Company applies manufacturing overhead to jobs on the basis of machine ho

Question

Duggan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $337,770 for the year, and machine usage is estimated at 125,100 hours.

For the year, $357,866 of overhead costs are incurred and 130,900 hours are used.

Compute the manufacturing overhead rate for the year. (Round answers to 2 decimal places, e.g. 1.25.)

Manufacturing overhead rate: $2.70 per machine hour

What is the amount of under- or overapplied overhead at December 31?

A) Manufacturing Overhead: $ ______

Duggan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $337,770 for the year, and machine usage is estimated at 125,100 hours. For the year, $357,866 of overhead costs are incurred and 130,900 hours are used. Compute the manufacturing overhead rate for the year. (Round answers to 2 decimal places, e.g. 1.25.) Manufacturing overhead rate: $2.70 per machine hour What is the amount of under- or overapplied overhead at December 31? A) Manufacturing Overhead: $ ______

Explanation / Answer

Hi,

Please find the answer as follows:

Manufacturing Overhead Rate = 337770/125100 = 2.70 per hour

Amount of Overhead Underapplied = 357866 - 2.70*130900 = 4436

Thanks.

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