Happy Clicks Inc. uses a predetermined overhead allocation rate of $4.75 per machine hour. Actual overhead costs incurred during the year are as follows: $$\begin{array} { | l | r | }
\hline \text { Indirect materials } & \$ 5,200 \
\hline \text { Indirect labor } & \$ 3,750 \
\hline \text { Plant depreciation } & \$ 4,800 \
\hline \text { Plant utilities and insurance } & \$ 9,530 \
\hline \text { Other plant overhead costs } & \$ 12,700 \
\hline \text { Total machine hours used during the year } & 7,520 \text { hours } \
\hline
\end{array}$$ What is the amount of manufacturing overhead cost allocated to Work-in-Process Inventory during the year?

Question

Happy Clicks Inc. uses a predetermined overhead allocation rate of $4.75 per machine hour. Actual overhead costs incurred during the year are as follows: $$\begin{array} { | l | r | } 
\hline \text { Indirect materials } & \$ 5,200 \
\hline \text { Indirect labor } & \$ 3,750 \
\hline \text { Plant depreciation } & \$ 4,800 \
\hline \text { Plant utilities and insurance } & \$ 9,530 \
\hline \text { Other plant overhead costs } & \$ 12,700 \
\hline \text { Total machine hours used during the year } & 7,520 \text { hours } \
\hline
\end{array}$$ What is the amount of manufacturing overhead cost allocated to Work-in-Process Inventory during the year?

Quizplus · Accepted Answer

The manufacturing overhead cost allocated is calculated by multiplying the predetermined overhead rate by the total machine hours used: $4.75 * 7,520 = $35,720.

Happy Clicks Inc What Is the Amount of Manufacturing Overhead Cost Allocated to $4.75