Bell Corporation manufactures computers. Assume that Bell: • allocates manufacturing overhead based on machine hours. • estimated 12,000 machine hours and $93,000 of manufacturing overhead costs. The predetermined overhead rate is $7.75 per machine hour. • actually used 15,000 machine hours and incurred the following actual costs: Indirect labor $14,000 Depreciation on plant 49,000 Machinery repair 17,000 Direct labor 75,000 Plant supplies 5,000 Plant utilities 10,000 Advertising 33,000 Sales commissions 23,000 How much manufacturing overhead would Bell allocate?
Bell Corporation manufactures computers. Assume that Bell: • allocates manufacturing overhead based on machine hours. • estimated 12,000 machine hours and $93,000 of manufacturing overhead costs. The predetermined overhead rate is $7.75 per machine hour. • actually used 15,000 machine hours and incurred the following actual costs: Indirect labor $14,000 Depreciation on plant 49,000 Machinery repair 17,000 Direct labor 75,000 Plant supplies 5,000 Plant utilities 10,000 Advertising 33,000 Sales commissions 23,000 How much manufacturing overhead would Bell allocate?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Question
Bell Corporation manufactures computers. Assume that Bell:
|
•
|
allocates manufacturing
|
|
•
|
estimated
12,000
machine hours and
$93,000
of $7.75
per machine hour. |
|
•
|
actually used
15,000
machine hours and incurred the following actual costs: |
|
Indirect labor
|
$14,000
|
|---|---|
|
|
49,000
|
|
Machinery repair
|
17,000
|
|
Direct labor
|
75,000
|
|
Plant supplies
|
5,000
|
|
Plant utilities
|
10,000
|
|
Advertising
|
33,000
|
|
Sales commissions
|
23,000
|
How much manufacturing overhead would Bell allocate?
Transcribed Image Text:0 A. $95,000
O B. $116,250
с. $93,000
D. $226,000
0000
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