ezto.mheducation.com/hm.tpx nect Chapters 7 & 9) Instructions I help Question 22

Question

ezto.mheducation.com/hm.tpx nect Chapters 7 & 9) Instructions I help Question 22 fof 22 Save & Exit Submit Time remaining: 2:03:39 method. The department method allocated overhead costs at a rate of $45 per machine hour. The cost accountant for the Finishing Department has gathered the following data: Drivers Material handling Machine setups Utilities Quality control Tons of material handled Number of production runs Machine hours Number of inspections Amount $ 65 3.750 15 $ 400 During Aprit, Mega purchased and used $120.000 of direct materials at $15 per ton. There were eight (8) production runs using a total of 12.000 machine hours in April. The manager of the Finishing Department needed 12 Inspections Actual overhead costs totaled $865,000 for the month How much overhead costs were applied to the Work-in-Process Inventory during April using traditional costing? O $734.800 O $540000. $865,000 O $879.800 Type here to search

Explanation / Answer

Traditional costing:

Under this approach, based on pre determined single overhead rate overhead will be applied to production.

In the given problem machine hours is the overhead cost driver.

and,

Overhead applied = machine hours used * overhead rate per machine hour

Given details:

Ovehear rate per machine hour = 45

Machine hours used in April = 12000

Overhead applied = 12,000 * 45 = $540,000

Correct option is $540,000

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