Aurora, Inc. estimates manufacturing overhead costs for the 2019 accounting period as follows: Equipment depreciation............................................ $344,000 Supplies..................................................................42,000

Question:

Aurora, Inc. estimates manufacturing overhead costs for the 2019 accounting period as follows:
Equipment depreciation............................................ $344,000
Supplies..................................................................42,000
Materials handling.................................................... 68,000
Property taxes......................................................... 30,000
Production setup...................................................... 42,000
Rent...................................................................... 70,000
Maintenance........................................................... 60,000
Supervisory salaries................................................. 244,000
The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in 2019 were 200,000 and for machines were 125,000.
Required
a. Calculate the predetermined overhead rate.
b. Determine the amount of manufacturing overhead applied to Work in Process Inventory during the 2019 period if actual machine hours were 140,000.
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Fundamental Managerial Accounting Concepts

ISBN: 978-1259569197

8th edition

Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds

Question Posted: