A manufacturing company estimates it will incur $240,000 of overhead costs in the next year. The compan allocates overhead using machine hours, and estimates it will use 1,600 machine hours in the next year. During the month of June, the company used 80 machine hours on Job 1 and 70 machine hours on Job 2 1. Compute the predetermined overhead rate to be used to apply overhead during the year. Predetermined Overhead Rate = Estimated Overhead Costs Estimated Activity Base 2. Determine how much overhead should be applied to Job 1 and to Job 2 for June. Machine Hours Used x Predetermined OH rate = OH Applied 80 hours Job 1 Job 2 70 hours Total 150 hours

A manufacturing company estimates it will incur $240,000 of overhead costs in the next year. The compan allocates overhead using machine hours, and estimates it will use 1,600 machine hours in the next year. During the month of June, the company used 80 machine hours on Job 1 and 70 machine hours on Job 2 1. Compute the predetermined overhead rate to be used to apply overhead during the year. Predetermined Overhead Rate = Estimated Overhead Costs Estimated Activity Base 2. Determine how much overhead should be applied to Job 1 and to Job 2 for June. Machine Hours Used x Predetermined OH rate = OH Applied 80 hours Job 1 Job 2 70 hours Total 150 hours

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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