ACCT 505 Solutions to Weekly Practice Problems - Week 2

The estimated total manufacturing overhead cost is computed as follows:

Y = $750,000 + $4.00 per MH × 150,000 MHs

 

Estimated fixed manufacturing overhead..............
$  750,000
Estimated variable manufacturing overhead
$4.00 per MH × 150,000 MHs...........................
    600,000
Estimated total manufacturing overhead cost........
$1,350,000
 
 
 

    The predetermined overhead rate is computed as follows:

 

Estimated total manufacturing overhead...
$1,350,000
 
÷ Estimated total machine-hours (MHs)....
150,000
MHs
= Predetermined overhead rate...............
$9.00
per MH
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