Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $492,000 and 30,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $517,000 and 28,300 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: (Round your intermediate calculations to 2 decimal places.)
A) $464,120
B) $492,000
C) $487,703
D) $25,000

Question

Quizplus · Accepted Answer

The predetermined overhead rate is calculated as estimated total fixed manufacturing overhead divided by estimated machine-hours: $492,000 / 30,000 = $16.40 per machine-hour. The applied overhead is then calculated by multiplying this rate by the actual machine-hours: $16.40 * 28,300 = $464,120.

Bernson Corporation Is Using a Predetermined Overhead Rate That Was