Carlson Company uses a predetermined rate to apply overhead.At the beginning of the year,Carlson estimated its overhead costs at $240,000,direct labour hours at 40,000,and machine hours at 10,000.Actual overhead costs incurred were $249,280,actual direct labour hours were 41,000,and actual machine hours were 11,000. If the predetermined overhead rate is based on machine hours,what is the total amount credited to the factory overhead account for the year for Carlson?

Question

Quizplus · Accepted Answer

To calculate the total amount credited to the factory overhead account, we need to multiply the actual machine hours by the predetermined overhead rate.

Predetermined overhead rate = Estimated overhead costs / Estimated machine hours
= $240,000 / 10,000 machine hours
= $24 per machine hour

Total amount credited to the factory overhead account = Actual machine hours x Predetermined overhead rate
= 11,000 machine hours x $24 per machine hour
= $264,000

Therefore, the correct answer is D.

Carlson Company Uses a Predetermined Rate to Apply Overhead