Thornton, Inc. estimates manufacturing overhead costs for the Year 3 accounting period as follows. Equipment depreciation Supplies Materials handling Property taxes Production setup $191,300 20,700 33,100 13,300 19,300 44,400 39,700 392,200 Rent Maintenance Supervisory salaries The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in Year 3 were 209,000 and for machines were 130,000. Required a. Calculate the predetermined overhead rate. (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. (Do not round intermediate calculations.)
Thornton, Inc. estimates manufacturing overhead costs for the Year 3 accounting period as follows. Equipment depreciation Supplies Materials handling Property taxes Production setup $191,300 20,700 33,100 13,300 19,300 44,400 39,700 392,200 Rent Maintenance Supervisory salaries The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in Year 3 were 209,000 and for machines were 130,000. Required a. Calculate the predetermined overhead rate. (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. (Do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Thornton, Inc. estimates manufacturing overhead costs for the Year 3 accounting period as follows.
Equipment depreciation
Supplies
Materials handling
Property taxes
Production setup
Rent
Maintenance
$191,300
20,700
33,100
13,300
19,300
44,400
39,700
392,200
Supervisory salaries
The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in Year 3 were 209,000 and for
machines were 130,000.
Required
a. Calculate the predetermined overhead rate. (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. (Do not round intermediate calculations.)
a. Predetermined overhead rate
per machine hour
b. Applied manufacturing overhead
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