Acton Corporation, which applies manufacturing overhead on the basis of machine-
ID: 2405163 • Letter: A
Question
Acton 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 $361,260 Estimated machine-hours 2,700 Actual manufacturing overhead $354,700 Actual machine-hours 2,660 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 overhead for the year was: Noreen 4e Recheck 2017-16-03
$5,352 underapplied
$5,352 overapplied
$1,208 underapplied
$1,208 overapplied
Explanation / Answer
Correct Answer $1208 Overapplied
Calculations
A
Estimated Manufacturing Overheads
$ 361,260.00
B
Estimated Machine Hours
2700
C=A/B
Predetermined Overheads
$ 133.80
D
Actual Machine Hours
2660
E=C*D
Applied Overheads
$ 355,908.00
F
Actual Manufacturing Overheads
$ 354,700.00
G=E-F
Over applied Manufacturing Overheads
$ 1,208.00
When Manufacturing overheads applied are more than Actual Overheads Incurred then it is called to be Over applied.
Calculations
A
Estimated Manufacturing Overheads
$ 361,260.00
B
Estimated Machine Hours
2700
C=A/B
Predetermined Overheads
$ 133.80
D
Actual Machine Hours
2660
E=C*D
Applied Overheads
$ 355,908.00
F
Actual Manufacturing Overheads
$ 354,700.00
G=E-F
Over applied Manufacturing Overheads
$ 1,208.00
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