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28 August, 14:27

Manufacturing overhead is applied to the product based on machine hours used in each department under the rate of $20 per machine hour. The total machine hours are $60,000 of which $25,000 are related to the Mixing Department and the remaining are related to the Baking Department.

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  1. 28 August, 15:39
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    The manufacturing overhead used to the mixing department is = $ 700,000

    Explanation:

    Solution

    For the information in the question stated the manufacturing overhead is used to each department based on the machine hours under a rate per machine hour.

    So, the manufacturing overhead put into a department shall be equal to as

    = The Machine hours used by the department * Manufacturing overhead rate per machine hour

    Now,

    The Calculation of manufacturing overhead applied to the baking department is given as:

    From the information in the question stated we have,

    The hours used by the machine for the baking department = 25,000 machine hours,

    The Manufacturing rate overhead per machine hour = $ 20

    Hence,

    The manufacturing overhead applied to the baking department is defined as

    = The Machine hours used by the baking department * Manufacturing overhead rate per machine hour

    Which is,

    = 25,000 * $ 20 = $ 500,000

    Thus,

    The manufacturing overhead applied to the baking department is defined as = $ 500,000

    The Calculation of manufacturing overhead applied to the Mixing department is based on the information stated in the question thus we have:

    The Machine hours used by the Mixing department = (60,000 - 25,000) = 35,000 machine hours,

    The Manufacturing rate of overhead per machine hour = $ 20

    Now,

    The manufacturing overhead applied to the Mixing department is

    = The Machine hours used by the Mixing department * Manufacturing rate overhead per machine hour

    = 35,000 * $ 20

    = $ 700,000

    Therefore, The manufacturing overhead used to the mixing department is = $ 700,000
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