The Space Company uses machine hours as the allocation base for assigning indire

Question

The Space Company uses machine hours as the allocation base for assigning indirect product costs to its various product lines. At the start of the period, it is estimated that production is going to require 18745 machine hours during the year. The fixed manufacturing overhead is estimated at $203189 with the variable manufacturing overhead estimated at $2.16 per machine hour. At the end of the period, it was determined that the Space Company actually incurred 16080 machine hours with actual total overhead of $258472.

Determine how much the overhead was either over or under applied during the period. Enter under applied overhead as a negative number (credit) and over applied overhead as a positive number. Round your answer to two decimal places.

Explanation / Answer

Predetermined overhead rate = 2.16+(203189/18745)= $13.00 Overhead applied = 16080*13= $209040 Under applied overhead = 209040-258472 = -49432

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.