Asked by JAVARIN OTHONG on Jul 04, 2024
Verified
Flagler Company allocates overhead based on machine hours. It estimated overhead costs for the year to be $420,000. Estimated machine hours were 50,000. Actual hours and costs for the year were 46,000 machine hours and $380,000 of overhead.
a. Compute the overhead rate for the year.
b. What is the amount of applied overhead for the year?
c. What is the amount of under- or overapplied overhead for the year?
Overapplied Overhead
Occurs when the allocated manufacturing overhead costs are more than the actual overhead costs incurred, leading to adjustments in cost accounting records.
Overhead Rate
The ratio of indirect costs to a base activity, used to allocate overhead costs to products or job orders.
- Compute fixed overhead rates using various allocation foundations.
Verified Answer
MB
Manoo BhattJul 06, 2024
Final Answer :
a. $420,000 ÷ 50,000 = $8.40 overhead rate
b. $8.40 × 46,000 machine hours = $386,400
c. $380,000 - $386,400 = $6,400 overapplied
b. $8.40 × 46,000 machine hours = $386,400
c. $380,000 - $386,400 = $6,400 overapplied
Learning Objectives
- Compute fixed overhead rates using various allocation foundations.
Related questions
Technics Inc ...
Cavy Company Estimates That the Factory Overhead for the Following ...
The Management of Schneiter Corporation Would Like to Investigate the ...
The Management of Kotek Corporation Would Like to Investigate the ...
Lightner Corporation Bases Its Predetermined Overhead Rate on the Estimated ...