Scottso Corporation applies overhead using a normal costing approach based upon machine-hours.Budgeted factory overhead was $232,750,budgeted machine-hours were 17,500.Actual factory overhead was $227,830,actual machine-hours were 16,150.How much overhead would be applied to production?

Question

Quizplus · Accepted Answer

The predetermined overhead rate is calculated as:
Predetermined overhead rate = Budgeted factory overhead/Budgeted machine-hours
= $232,750/17,500
= $13.30 per machine-hour

The overhead applied to production is calculated as:
Overhead applied to production = Predetermined overhead rate x Actual machine-hours
= $13.30 x 16,150
= $214,795

Therefore, the correct answer is A) $214,795.

Scottso Corporation Applies Overhead Using a Normal Costing Approach Based