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Current Attempt in Progress Sheffield Corp, applies overhead on the basis of machine hours. Given the following data, compute
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Answer #1

The answer to this question is $4,192,500 applied and $77,500 under applied. To get this take the estimated annual overhead cost ($4,300,000) and divide that by the estimated machine hours (200,000). This gets you the hourly rate of the machine (4,300,000 / 200,000 = $21.50) now multiple the hourly rate ($21.50) by actual machine hours (195,000) and you will get ($21.50 * 195,000 = $4,192,500) This is your applied overhead. Now subtract the applied overhead from the estimated overhead and you will come out with the amount that was over/under applied ($4,270,000 - $4,192,500 = $77,500) because this number is positive this means that the actual is greater than the estimated overhead and that estimated overhead is underapplied.

source: WileyPlus
answered by: Caleb
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Answer #2

Answer: $4,192,500 applied and $775,000 overapplied

Working

Particulars Amount Remarks
Estimated annual overhead cost $4,300,000 (a)
Estimated machine hours 200,000 (b)
Overhead rate $21.50 c=(a/b)
Actual machine hours 195,000 (d)
Overhead applied $4,192,500 e=(c*d)
Actual annual overhead cost $4,270,000 (f)
Under/(over) applied overhead $77,500 g=(f-e)
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