Gibson, Incorporated estimates manufacturing overhead costs for the Year 3 accounting period as follows. Equipment depreciation Supplies Materials handling Property taxes Production setup Rent Maintenance Supervisory salaries $ 190,100 20,500 32,100 14,500 19,500 44,100 38,500 238,700 The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in Year 3 were 218,000 and for machines were 130,000. Required a. Calculate the predetermined overhead rate. Note: Round your answer to 2 decimal places. b. Determine the amount of manufacturing overhead applied to Work in Process Inventory during the Year 3 period if actual machine hours were 145,000. Note: Do not round intermediate calculations. a. Predetermined overhead rate b. Applied manufacturing overhead per machine hour
Gibson, Incorporated estimates manufacturing overhead costs for the Year 3 accounting period as follows. Equipment depreciation Supplies Materials handling Property taxes Production setup Rent Maintenance Supervisory salaries $ 190,100 20,500 32,100 14,500 19,500 44,100 38,500 238,700 The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in Year 3 were 218,000 and for machines were 130,000. Required a. Calculate the predetermined overhead rate. Note: Round your answer to 2 decimal places. b. Determine the amount of manufacturing overhead applied to Work in Process Inventory during the Year 3 period if actual machine hours were 145,000. Note: Do not round intermediate calculations. a. Predetermined overhead rate b. Applied manufacturing overhead per machine hour
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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am.1111.
Transcribed Image Text:Gibson, Incorporated estimates manufacturing overhead costs for the Year 3 accounting period as follows.
Equipment depreciation
Supplies
Materials handling
Property taxes
Production setup
Rent
Maintenance
Supervisory salaries
$ 190,100
20,500
32,100
14,500
19,500
44,100
38,500
238,700
The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in Year 3 were 218,000 and for
machines were 130,000.
Required
a. Calculate the predetermined overhead rate.
Note: Round your answer to 2 decimal places.
b. Determine the amount of manufacturing overhead applied to Work in Process Inventory during the Year 3 period if actual machine
hours were 145,000.
Note: Do not round intermediate calculations.
a. Predetermined overhead rate
b. Applied manufacturing overhead
per machine hour
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