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12 September, 10:39

Reyes Corporation applies overhead using a normal costing approach based upon machine-hours. Budgeted factory overhead was $289,920, budgeted machine-hours were 19,200. Actual factory overhead was $294,920, actual machine-hours were 19,750. How much overhead would be applied to production?

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  1. 12 September, 12:36
    0
    Applied Overhead $ 298225

    Explanation:

    Reyes Corporation

    Budgeted factory overhead $289,920,

    Budgeted machine-hours 19,200

    Actual factory overhead $294,920,

    Actual machine-hours were 19,750

    Overhead Rate = Budgeted factory overhead/Budgeted machine-hours

    Overhead Rate = $289,920 / 19,200 = 15.1

    Applied Overhead = Overhead rate * actual machine hours

    Applied Overhead = 15.1 * 19750 = $ 298225
  2. 12 September, 12:50
    0
    Allocated MOH = $297,435

    Explanation:

    Giving the following information:

    Budgeted factory overhead was $289,920

    budgeted machine-hours were 19,200.

    Actual machine-hours were 19,750

    First, we need to calculate the estimated overhead rate.

    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 = 289,920/19,200 = $15.06 per machine hour.

    Now, we can allocate overhead:

    Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

    Allocated MOH = 15.06*19,750 = $297,435
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