Schneider inc. had the following information relating to year 1:  Budgeted manufacturing overhead                          74,800 Actual manufacturing overhead                                78,300 Applied manufacturing overhead                              76,500 Estimated direct labor hours                                      44,000   If Schneider decides to use the actual results from year 1 to determine the year 2 overhead rate, what is the year 2 overhead rate?   A. $1.700 B. $1.738 C. $1.740 D. $1.780

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.