Practice Exercise 4 (Part Level Submission) At the end of the year, but before a

Question

Practice Exercise 4 (Part Level Submission) At the end of the year, but before an adjustment had been made to close Manufacturing ov the following account balances: erhead Control, A-1 Frames had Raw Materials Inventory 126,874 Work in Process Inventory 147,054 Finished Goods Inventory $ 343,200 Cost of Goods Sold $1,959,740 At the beginning of the year, management had estimated that total manufacturing overhead would be $591,640 and h planned to apply overhead to jobs based on an estimated use 42,260 of machine hours. The actual number of ma hours use chine d during the year was 49,400, and actual manufacturing overhead cost for the year was $715,700. (a) Your answer is correct. d overhead rate did the company use throughout the year? (Round answer to 2 decimal places, e.g. 1s 25 14 Predetermined overhead rate ·machine hour INK TO TEXT

Explanation / Answer

Predetermined rate=Estimated manufacturing overhead divided by Estimated use of machine hours

=$591,640 / 42,260 = $14.00 per machine hour

Overhead applied during the period= 49,400 x $ 14 =$691,600 (A)

Actual Overahead = $ 715,700 (B)

Overhead underapplied= B-A= $24,100

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