Kreuzer Corporation is using a predetermined overhead rate of $22.30 per machine-hour that was based on estimated total fixed manufacturing overhead of $446,000 and 20,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $409,000 and 18,200 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to:

Question

Fitzgerald

Business

19 April, 11:39

Kreuzer Corporation is using a predetermined overhead rate of $22.30 per machine-hour that was based on estimated total fixed manufacturing overhead of $446,000 and 20,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $409,000 and 18,200 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to:

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Answers (1)

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Bucko · Answer 1

The $631,090 is the manufacturing overhead that would have been applied to all jobs during the period.

Explanation:

For computing the amount of manufacturing overhead, the calculation is shown below

= Actual machine hours * Predetermined overhead rate

= 28,300 * $22.30

= $631,090

Other cost like fixed manufacturing overhead, fixed machine hours, actual manufacturing overhead is not to be considered because these cost are considered in computing the predetermined overhead rate. But it is already given in the question. And some cost are irrelevant.

Thus, the $631,090 is the manufacturing overhead that would have been applied to all jobs during the period.