Griffin, Inc., estimates manufacturing overhead costs for the 2015 accounting pe
ID: 2461752 • Letter: G
Question
Griffin, Inc., estimates manufacturing overhead costs for the 2015 accounting period as follows. Equipment depreciation $ 172,000 Supplies 21,000 Materials handling 34,000 Property taxes 15,000 Production setup 21,000 Rent 35,000 Maintenance 30,000 Supervisory salaries 122,000 The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in 2015 were 200,000 and for machines were 125,000.
Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.)
Determine the amount of manufacturing overhead applied to Work in Process Inventory during the 2015 period if actual machine hours were 140,000. (Do not round intermediate calculations.)
Required: a.Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.)
Explanation / Answer
Solution.
Calculation for Allocation of manufactureing overhead.
Predetermined overhead rate = 450,000 / 125,000 = $3.6
2. Determination of the amount of manufacturing overhead applied to Work in Process Inventory during the 2015 period if actual machine hours were 140,000.
Predetermined overhead rate = 450,000 / 140,000 = $3.21
(WIP inventory not given)
Particulars Amount Equipment depreciation 172,000 Supplies 21,000 Materials handling 34,000 Property taxes 15,000 Production setup 21,000 Rent 35,000 Maintenance 30,000 Supervisory salaries 122,000 Total 450,000