Developing and Using a Predetermined Overhead Rate Assume that the following pre

Question

Developing and Using a Predetermined Overhead Rate Assume that the following predictions were made for 2009 for one of the plants of Milliken & Company: Total manufacturing overhead for the year $42,000,000 Total machine hours for the year 2,000,000 Actual results for February 2009 were as follows: Manufacturing overhead $5,480,000 Machine hours 310,000 (a) Determine the 2009 predetermined overhead rate per machine hour. $AnswerCorrect (b) Using the predetermined overhead rate per machine hour, determine the manufacturing overhead applied to Work-in-Process during February. $AnswerIncorrect (c) As of February 1, actual overhead was underapplied by $500,000. Determine the cumulative amount of any overapplied or underapplied overhead at the end of February. $AnswerIncorrect

Explanation / Answer

A)Overhead rate = 42,000,000 / 2,000,000 =$ 21 per machine hour

b) Overhead applied = 21 * 310000 = $ 6,510,000

c) Overhead (overapplied) / underapplied = 5,480,000 - 6,510,000 = - 1,030,000 overapplied

cummulative effect = 1,030,000 - 500,000 = 530,000 overapplied

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

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