A local manufacturing company estimated the following expenses for the upcoming year:a. Insurance on factory: $100,000b. Factory security: 1 guard at $20/hour for a 2,000 hour work year. 1 production supervisor at $90,000/yeard. Repair/Maintenance Technicians: 2 technicians at $40/hour each for a 2,000 hour workyeare. Depreciation: $25/machine hourf. Utilities: $7/machine hourThe company applies overhead on the basis of machine hours.Required:Build the cost formulaAssume one unit of output takes 2 machine hours, and the estimated production for the yearis 20,000 units• Calculate the expected number of machine hours to be used in the year.o Calculate the estimated total manufacturing overhead cost.o Calculate the applied overhead rate per machine hour.o Calculate the applied overhead per unit of output.

Manufacturing overhead is generally described as all indirect expenses incurred throughout the…

Answered: A local manufacturing company estimated…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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