Reyes Corporation applies overhead using a normal costing approach based upon machine-hours. Budgeted factory overhead was $266,400, budgeted machine-hours were 18,500. Actual factory overhead was $287,920, actual machine-hours were 19,050.
- How much overhead would be applied to production?
A) $266,400.
B) $274,320.
C) $279,607.
D) $287,920.

Question

Quizplus · Accepted Answer

The overhead rate is calculated as budgeted overhead divided by budgeted machine-hours: $266,400 / 18,500 = $14.40 per machine-hour. Applied overhead is then the overhead rate multiplied by actual machine-hours: $14.40 * 19,050 = $274,320.

Reyes Corporation Applies Overhead Using a Normal Costing Approach Based