Nguyen Corporation uses job-order costing and applies overhead
on the bases of machine-hours
worked. For the just-completed year, the company estimated that it
would work 75,000
machine hours and incur $450,000 in manufacturing overhead cost.
The company actually
worked 80,000 machine-hours. The company has provided the following
financial data
concerning its actual operations for the year.
What is Total applied manufacturing overhead for the year?
Answer - Total Estimated Machine Hours = 75000
Total Manufacturing Overhead = $450000
Overhead Allocation rate Per Machine Hour = Total Manufacturing Overheads / Total Machine Hours
Overhead Allocation rate Per Machine Hour = $450000 / 75000 Hours
Overhead Allocation rate Per Machine Hour = $6 Per Hour
Actual Machine Hours = 80000 Machine Hours
Total applied Manufacturing Overheads = Actual Hours * Standard Overheads Allocation Rate Per Hour
Total applied Manufacturing Overheads = 80000hrs*6$ per Hour
Total applied Manufacturing Overheads = $ 480000
Hence the Total applied Manufacturing Overheads = $ 480000
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