16 Hurawalhi Company uses machine-hours (MHs) to allocate their manufacturing overhead (MOH) cost with capacity-based method. The company recognized the cost of unused (idle) capacity of $600 on the income statement last year. Given the following information, how much was the company's estimated MHs for planned production last year? Estimated MOH cost (all fixed) Estimated MHs for planned production Estimated MHs at capacity POHR using the traditional method POHR at capacity $ ? ? MHs ? MHs 12 per MH $ 10 per MH A. 72 MHs В. 250 MHs C. 300 MHs D. 350 MHs Е. 360 MHs
16 Hurawalhi Company uses machine-hours (MHs) to allocate their manufacturing overhead (MOH) cost with capacity-based method. The company recognized the cost of unused (idle) capacity of $600 on the income statement last year. Given the following information, how much was the company's estimated MHs for planned production last year? Estimated MOH cost (all fixed) Estimated MHs for planned production Estimated MHs at capacity POHR using the traditional method POHR at capacity $ ? ? MHs ? MHs 12 per MH $ 10 per MH A. 72 MHs В. 250 MHs C. 300 MHs D. 350 MHs Е. 360 MHs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:16 Hurawalhi Company uses machine-hours (MHs) to allocate their manufacturing overhead (MOH) cost with capacity-based
method. The company recognized the cost of unused (idle) capacity of $600 on the income statement last year. Given the
following information, how much was the company's estimated MHs for planned production last year?
Estimated MOH cost (all fixed)
$
Estimated MHs for planned production
Estimated MHs at capacity
? MHs
? MHs
$ 12 per MH
$ 10 per MH
POHR using the traditional method
POHR at capacity
А.
72 MHs
В.
250 MHs
С.
300 MHs
D.
350 МHs
E.
360 MHs
Expert Solution
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Formula used
Plant wide overhead rate is denoted by (POHR)
POHR using traditional method =estimated MOH cost /estimated MHs for planned production
POHR at capacity =estimated MOH cost /estimated MHs at capacity
Estimated MHS at capacity =estimated MHs at planned production + unused capacity
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