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A company leases a machine in the manufacturing of its product and this fixed cost represents the company's only manufacturing overhead (MOH) cost. Because
A company leases a machine in the manufacturing of its product and this fixed cost represents the company's only manufacturing overhead (MOH) cost. Because the company has a long-term arrangement, the actual MOH does not vary from the amount estimated by the company at the beginning of the period. The company is considering using the capacity-based method in calculating its predetermined overhead rate (POHR) and compiled the following information for the period: Estimated activity = Actual activity Machine capacity Estimated MOH Cost 18,600 Machine-hours 23,500 Machine-hours $658,000 If the company implements the capacity-based method for the period, what would be reported as the cost of unused capacity? ANS: $
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