Savallas Company is highly automated and uses computers to control manufacturing

Question

Savallas Company is highly automated and uses computers to control manufacturing operations. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year:

During the year, a severe economic recession resulted in cutting back production and a buildup of inventory in the company

Computer-hours 87,000 Fixed manufacturing overhead cost $ 1,274,000 Variable manufacturing overhead per computer-hour $ 3.60

Explanation / Answer

total estimated overheads =313200+1274000=1587200 total overheads as per company records =5374000+180000=5554000 thus overheads has overapplied by$3966800

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.