Question
Little Lizards Everywhere Co. (LLE) uses job-order costing and allocates MOH using normal costing. LLE uses two MOH (Manufacturing Overhead) accounts: MOH Control for accumulating
Little Lizards Everywhere Co. (LLE) uses job-order costing and allocates MOH using normal costing. LLE uses two MOH (Manufacturing Overhead) accounts: MOH Control for accumulating MOH costs and MOH Allocated for recording MOH allocated to Jobs. For 2019, LLE decided to use machine hours as its base for allocating MOH and estimated that it would use 49,000 machine hours that year. Before the year began, LLE set a MOH rate of $22 per machine hour. During 2019 LLE actually used 50,000 machine hours and actually spent $1,120,000 on MOH costs.
Before the year began, what amount did LLE estimate that they would spend on MOH during 2019?
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