Predetermined Rates; Applied Overhead. Dagnut Company set normal capacity at 60,000 machine hours. The expected operating level
Question:
Predetermined Rates; Applied Overhead. Dagnut Company set normal capacity at 60,000 machine hours. The expected operating level for the period just ended was 45,000 hours. At this expected actual capacity, variable expenses were estimated to be $29,250 and fixed expenses, $18,000. Actual results show that 47,000 machine hours were used and that actual factory overhead totaled $48,000 during the period. LO6 Required:
(1) Compute the predetermined factory overhead rate based on normal capacity.
(2) Compute the predetermined factory overhead rate based on expected actual capacity.
(3) Compute the amount of factory overhead charged to production if the company used the normal capacity rate.
(4) Compute the amount of factory overhead charged to production if the company used the expected actual capacity rate.
(5) Compute the amount of over- or underapplied overhead if the company used the normal capacity rate.
(6) Compute the amount of over- or underapplied overhead if the company used the expected actual capacity rate.
Step by Step Answer:
Cost Accounting
ISBN: 9780538828079
11th Edition
Authors: Lawrence H. Hammer, William K. Carter, Milton F. Usry