Question

HDMI applies overhead on the basis of units produced. HDMI provided the following information for the...

HDMI applies overhead on the basis of units produced. HDMI provided the following information for the current year

Budgeted Overhead                  385,000

Actual Overhead                       430,000

Actual Labor Hours                   30,000

Actual # of units sold                 620,000

Underapplied Overhead             15,000

Budgeted Production Units        660,000

How many units were produced during the current year?

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Answer #1

Predetermined overhead rate = Budgeted Overhead / Budgeted Production Units

= 385,000/660,000

= $0.5833333333 per unit

Overhead applied = Actual units produced x Predetermined overhead rate

= Actual units produced x 0.5833333333

Under applied overhead = Actual overhead - Over applied overhead

15,000 = 430,000- Actual units produced x 0.5833333333

Actual units produced x 0.5833333333   = 415,000

Actual units produced = 415,000/0.5833333333

= 711,429 units

711,429 units were produced during the current year

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