Caber Corporation applies manufacturing overhead on the basis of machine-hours.
ID: 2508712 • Letter: C
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 5,800. The company's predetermined overhead rate for the year was $10.10 per machine-hour. The applied manufacturing overhead for the year was closest to:
A. $58,017
B. $59,590
C. $60,600
D. $58,580
Explanation / Answer
Applied overhead=predetermined overhead rate*Actual machine hours
which is equal to
=(10.1*5800)
which is equal to
=$58580.