Question

Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.

Estimated manufacturing overhead $157,750
Estimated machine-hours 4,640
Actual manufacturing overhead $157,400
Actual machine-hours 4,860

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 applied manufacturing overhead for the year is closest to:

a. $357,012
b. $354,474
c. $355,489
d. $352,951

Answer 1

Answer is not in the option

Step-by-step explanation:

Budgeted Overhead Rate = $157,750/4,640

= $ 34/ machine hour

Applied Manufacturing Overhead = $34 x 4,860

$165,230

Answer 2

Allocated MOH= $165,240

Step-by-step explanation:

Giving the following information:

Estimated manufacturing overhead $157,750

Estimated machine-hours 4,640

Actual manufacturing overhead $157,400

Actual machine-hours 4,860

First, we need to calculate the predetermined manufacturing overhead rate:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 157,750/4,640= $34 per machine hour

Now, we can calculate the allocated overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 34*4,860= $165,240