Question

Concord Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $309,680 for the year, and machine usage is estimated at 126,400 hours. For the year. $330,930 of overhead costs are incurred and 131,400 hours are used. Your answer is correct. Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.) Manufacturing overhead rate $ 245 per machine hour e Textbook and Media List of Accounts Attempts: 1 of 3 used - Your answer is partially correct. What is the amount of under-or overapplied overhead at December 31? Manufacturing Overhead $ 321930 Underapplied e Textbook and Media List of Accounts Save for Later Attempts: 1 of 3 used Submit Answer

Answer 1

a. Manufacturing overhead rate [Refer working note 1]	$2.45	per machine hour
b. Manufacturing Overhead [Refer working note 2]	$9,000	Under-applied

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Working note 1 - Calculation of Predetermined overhead rate
Estimated Overhead                                (a)	$309,680
Estimated machine hours                         (b)	126,400
Predetermined Overhead rate                   (a / b)	2.45	per machine hour

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Working note 2 - Calculation of over or under applied manufacturing overhead
Actual manufacturing overhead                                                                                                            (a)	$330,930
Applied manufacturing overhead [Actual machine hours x Overhead rate = 131,400 x $2.45]           (b)	$321,930
Manufacturing overhead                                                                                                                        (a - b)	$9,000

Note: Since applied manufacturing overhead ($321,930) is is less than the actual manufacturing overhead ($330,930), overhead is considered as under-applied.