Beltran Corporation produces wooden and aluminium baseball bats. In preparing th

Question

Beltran Corporation produces wooden and aluminium baseball bats. In preparing the current budget, Betran's management estimated a total of $387,000 in manufacturing overhead costs and 12,900 machine hours for the coming year. In December, Beltran's accountants reported actual manufacturing overhead incurred of $78,000 and 12,400 machine hours used during the year. Beltran applies overhead based on machine hours. What was Beltran's prederemined overhead rate for the year? How much manufacturing overhead did Beltran apply during the year?

Explanation / Answer

(a) What was Beltran’s predetermined overhead rate for the year?
$387,000 / 12,900 = $30 per hour

(b) How much manufacturing overhead did Beltran apply during the year?
12,400 x 30 = $372,000

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