Question

Blakely charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of machine hours. The following data pertain 23 to the current year:
Budgeted manufacturing overhead: $600,000
Actual manufacturing overhead: $560,000
Budgeted machine hours: 25,000
Actual machine hours: 20,000
Overhead applied to production totaled:_____________.
a. $448,000
b. $480,000.
c. $700,000.
d. $750,000
e. some other amount

Answer 1

Answer:

b. $480,000

Explanation:

With regards to the above information, first we need to calculate the manufacturing overhead rate.

Manufacturing overhead rate = Total estimated manufacturing overhead / Total amount of allocation base

Manufacturing overhead rate = $600,000 / 25,000 = $24

Therefore, allocated manufacturing overhead

= Overhead rate × Actual hours

= $24 × 20,000

= $480,000