Caber Corporation applies manufacturing overhead on the basis of machine-hours.

Question

Caber Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $60,600. Actual manufacturing overhead for the year amounted to $59,000 and actual machine-hours were 5,900. The company's predetermined overhead rate for the year was $10.10 per machine-hour 20. The applied manufacturing overhead for the year was closest to: A. $58,017 B. $59,590 C. $60,600 D. $58,597 Acton Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. 21. Estimated manufacturing overhead Estimated machine-hours Actual manufacturing overhead Actual machine-hours $139,080 3,800 $137,000 3,780 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. The predetermined overhead rate is closest to: A. $36.60 B. $36.41 ?. $36.24 D. $36.05

Explanation / Answer

20) B. $ 59, 590 Working: Applied manufacturing overhead = Actual Machine hours x Predtermined Overhead rate =                 5,900 x $    10.10 = $           59,590 21) A. $ 36.60 Working: Predetermined Overhead rate = Estimated Overhead costs/Estimated Machine hours = $       1,39,080 /         3,800 = $             36.60

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