Kamins Company uses a predetermined overhead rate of $6.00 per machine hour.Overhead was underapplied by $40,000 for the year, and actual machine hours totaled 70,000.How much was the actual overhead cost?

Question

Quizplus · Accepted Answer

The predetermined overhead cost is calculated as $6.00 per machine hour for 70,000 hours, which equals $420,000. Since overhead was underapplied by $40,000, the actual overhead cost is $420,000 + $40,000 = $460,000.

Kamins Company Uses a Predetermined Overhead Rate of $6