Coronado Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $292,552 for the year, and machine usage is estimated at 126,100 hours. For the year, $413,432 of overhead costs are incurred and 130,100 hours are used. (a) Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e. g. 1.25.) Manufacturing overhead rate $Type your answer here per machine hour

Question

Business

Xander Gates

25 March, 06:52

Coronado Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $292,552 for the year, and machine usage is estimated at 126,100 hours. For the year, $413,432 of overhead costs are incurred and 130,100 hours are used. (a) Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e. g. 1.25.) Manufacturing overhead rate $Type your answer here per machine hour

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Answers (1)

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Moriah Little · Answer 1

Estimated manufacturing overhead rate = $2.32 per machine hour.

Explanation:

Giving the following information:

Overhead costs are estimated to total $292,552 for the year, and machine usage is estimated at 126,100 hours.

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

Estimated manufacturing overhead rate = 292,552/126,100 = $2.32 per machine hour.