Question
Predetermined OH Rates; Capacity Measures Alberton Electronics makes inexpensive GPS navigation devices and uses a normal cost system that applies overhead based on machine
Predetermined OH Rates; Capacity Measures Alberton Electronics makes inexpensive GPS navigation devices and uses a normal cost system that applies overhead based on machine hours. The following current year budgeted data are available: Variable factory overhead at 100,000 machine hours Variable factory overhead at 150,000 machine hours $250,000 375,000 Fixed factory overhead at all levels between 10,000 and 180,000 machine hours 288,000 Practical capacity is 180,000 machine hours; expected capacity is two-thirds of practical. a. What is Alberton Electronics' predetermined VOH rate? Predetermined VOH rate $ 2.4 x per MH b. What is the predetermined FOH rate using practical capacity? Predetermined FOH rate $ 1.6 per MH c. What is the predetermined FOH rate using expected capacity? Predetermined FOH rate $ 2.4 per MH d. During the year, the firm records 110,000 machine hours and $542,000 of overhead costs. (1) How much variable overhead is applied? Applied VOH $ 102,000 x Applied FOH $ 176,000 (2) How much fixed overhead is applied using the rate found in (b)? (3) Calculate the total under- or overapplied overhead for the year using the rate found in (b). Note: Do not use a negative sign with your answer. $ 264,000 Underapplied (4) How much fixed overhead is applied using the rate found in (c)? Applied FOH $ 264,000 (5) Calculate the total under- or overapplied overhead for the year using the rate found in (c). Note: Do not use a negative sign with your answer. $ 14,000 Underapplied
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