Edwards Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $1800000 for the year and machine usage is estimated at 200000 hours.
In January $186000 of overhead costs are incurred and 22000 machine hours are used. For the remainder of the year $1940000 of additional overhead costs are incurred and 214000 additional machine hours are worked.
Instructions
(a) Compute the manufacturing overhead rate for the year.
(b) What is the amount of over- or underapplied overhead at January 31?
(c) What is the amount of over- or underapplied overhead at December 31?

Question

Quizplus · Accepted Answer

The Answer of Edwards Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $1800000 for the year and machine usage is estimated at 200000 hours.
In January $186000 of overhead costs are incurred and 22000 machine hours are used. For the remainder of the year $1940000 of additional overhead costs are incurred and 214000 additional machine hours are worked.
Instructions
(a) Compute the manufacturing overhead rate for the year.
(b) What is the amount of over- or underapplied overhead at January 31?
(c) What is the amount of over- or underapplied overhead at December 31?

Edwards Company Applies Manufacturing Overhead to Jobs on the Basis