Acer Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year.
-The applied manufacturing overhead for the year is closest to:

Question

Acer Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.  The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year.
-The applied manufacturing overhead for the year is closest to:

Quizplus · Accepted Answer

The predetermined overhead rate is calculated as follows:
Predetermined overhead rate = Estimated manufacturing overhead cost ÷ Estimated machine-hours
= $895,932 ÷ 72,000 machine-hours
= $12.44 per machine-hour

To calculate applied manufacturing overhead, the predetermined overhead rate is multiplied by the actual machine-hours worked during the year:
Applied manufacturing overhead = Predetermined overhead rate × Actual machine-hours
= $12.44 per machine-hour × 17,811 actual machine-hours
= $221,555.64, which rounds up to $221,556.

Therefore, the closest answer is D) $221,556.

Acer Corporation, Which Applies Manufacturing Overhead on the Basis of Machine-Hours