Griffin, Inc., estimates manufacturing overhead costs for the 2015 accounting pe

Question

Griffin, Inc., estimates manufacturing overhead costs for the 2015 accounting period as follows. Equipment depreciation $ 172,000 Supplies 21,000 Materials handling 34,000 Property taxes 15,000 Production setup 21,000 Rent 35,000 Maintenance 30,000 Supervisory salaries 122,000 The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in 2015 were 200,000 and for machines were 125,000.

Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.)

    

Determine the amount of manufacturing overhead applied to Work in Process Inventory during the 2015 period if actual machine hours were 140,000. (Do not round intermediate calculations.)

Required: a.

Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.)

Explanation / Answer

Solution.

Calculation for Allocation of manufactureing overhead.

Predetermined overhead rate = 450,000 / 125,000 = $3.6

2. Determination of the amount of manufacturing overhead applied to Work in Process Inventory during the 2015 period if actual machine hours were 140,000.

Predetermined overhead rate = 450,000 / 140,000 = $3.21

(WIP inventory not given)

Particulars Amount Equipment depreciation 172,000 Supplies 21,000 Materials handling 34,000 Property taxes 15,000 Production setup 21,000 Rent 35,000 Maintenance 30,000 Supervisory salaries 122,000 Total 450,000

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