A company expected its annual overhead costs to be $793100 and machine hours to equal 103000...

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Question

A company expected its annual overhead costs to be $793100 and machine hours to equal 103000 hours. Actual overhead was $7500

business accounting

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Answer 1

Answer #1

Option A

Explanation

Underapplied overhead occurs when a company has actual overhead costs greater than its budgeted costs. Overapplied overhead, on the other hand, occurs when a company has actual overheadcosts less than its budgeted costs.

Calculation

Budgeted overhead equals the actual hours worked times the predetermined overhead rate

Predetermined overhead rate is a company estimate, before the period begins, on how much overhead will cost per hour

In given case predetermined overhead rate = 793100/103000

= 7.7

Budgeted overhead rate = 7.7x96000

=739200

Actual overhead is greater than budgeted so overhead underapplied =750000-739200

=10800

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Answer 2

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A company expected its annual overhead costs to be $793100 and machine hours to equal 103000...

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A company expected its annual overhead costs to be $793100 and machine hours to equal 103000...

Homework Answers

Add Answer to: A company expected its annual overhead costs to be $793100 and machine hours to equal 103000...

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