Estimated manufacturing overhead costs were $40,000 and the number of estimated machine hours was 10,000.Actual overhead costs were $40,500 and the actual number of machine hours used was 10,200.Based on machine hours,the overhead application rate per hour is:

Question

Quizplus · Accepted Answer

Overhead application rate per hour = Estimated overhead costs / Estimated machine hours
= $40,000 / 10,000 = $4.00 per hour
Actual overhead costs and actual machine hours are not used in calculating the overhead application rate.

Estimated Manufacturing Overhead Costs Were $40,000 and the Number of Estimated