Cooper Copper allocates overhead based on machine hours. Estimated mtg. overhead
ID: 342091 • Letter: C
Question
Cooper Copper allocates overhead based on machine hours. Estimated mtg. overhead costs for the year totaled Cooper's production manager estimated that it would use machine hours during the year. Cooper actually used machine hours during the year and actually incurred of mfg. overhead $1,500,000 50,000 48,500 S1,530,000 What is the pre-determined overhead rate for the vear? What is the amount of applied overhead (i.e., OH assigned to WIP) for the year? Use the T-account to determine the amount of over or under applied overhead for the year What are the total debits to the OH Control Account? What are the total credits to the OH Control Account? Mfg. Overhead Control Ending balance Why does the overhead applied differ from the actual overhead cost? - pick the best answer Cooper likely produced more units than expected Cooper spent more on marketing than budgeted Variable mfg. overhead costs were less than anticipated Fixed mfg. overhead costs were greater than forecast. 2 4Explanation / Answer
1. Pre-Determined overhead rate= Total Estimated Overhead/Total Estimate machine hours
=15,00,000/50,000=$30 Per Direct labour hour
2. Applied overhead=Pre-Determined overhead rate*Ectimated machine hours
=$30*50,000=$15,00,000
3. Total debits to OverHead control A/c-$15,30,000
Total Credits to OverHead control A/c-$15,30,000
4. The Answer is 4. Fixed Mfg Overhead costs were greater than forecast