Luke Company uses a predetermined overhead rate of $25 per machine hour. Estimat
ID: 2576656 • Letter: L
Question
Luke Company uses a predetermined overhead rate of $25 per machine hour. Estimated machine hours at the beginning of the year were 1,000 and actual machine hours at the end of the year were 1,200. Estimated total manufacturing overhead costs at the beginning of the year are $25,000 and actual total manufacturing overhead costs at the end of the year are $26,000. What is the amount of manufacturing overhead that would have been applied to all jobs during the year?
$21,667
$30,000
$31,200
$25,000
$21,667
$30,000
$31,200
$25,000
Explanation / Answer
Answer is $30,000
Predetermined Overhead Rate = $25 per machine hour
Actual Machine hours = 1,200
Manufacturing Overhead applied = Predetermined Overhead Rate - Actual Machine hours
Manufacturing Overhead applied = $25 * 1,200
Manufacturing Overhead applied = $30,000
So, total manufacturing overhead applied to all jobs is $30,000
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