Blakely charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of machine hours.The following data pertain to the current year: Budgeted manufacturing overhead: $480,000 Actual manufacturing overhead: $440,000 Budgeted machine hours: 20,000 Actual machine hours: 16,000 Overhead applied to production totaled:
A)$352,000.
B)$384,000.
C)$550,000.
D)$600,000.
E)None of these choices are correct.

Question

Quizplus · Accepted Answer

The predetermined overhead rate = Budgeted manufacturing overhead/Budgeted machine hours
= $480,000/20,000 = $24 per machine hour

Overhead applied to production = Predetermined overhead rate x Actual machine hours
= $24 x 16,000
= $384,000

Therefore, the best choice is B) $384,000.

Blakely Charges Manufacturing Overhead to Products by Using a Predetermined