(For question 8 and 9) Acitelli Corporation which applies manufacturing overhead

Question

(For question 8 and 9) Acitelli Corporation which applies manufacturing overhead on the basis of machine - hours , has provided the following data, for its most recent year of operations. The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company?s predetermined overhead rate for the ye 8. The predetermined overhead rate is closest to: A. $42.30 B. $41.82 C. S42.12 D. $42.00 The overhead for the year was: A. $ 1,520 under applied B. $2,520 over applied C. $1,520 over applied D. $2.520 under applied

Explanation / Answer

Answer 8:

Predetermined overhead rate = Estimated Manufacturing Overheads/ Estimated machine-hours = 357,000/8,500 =$42

Correct answer is D. $42.

Answer 9:

Over/(under) application of overhead = Overhead applied on actual hours at predetermined rate - Actual overhead incurred

= $42*8560 - 358,000 = $1,520(Over-application)

Correct answer is C. $1,520 overapplied

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