Question

Scotts Corporation allocates overhead using an approach based upon machine-hours. Budgeted factory overhead was $266,400, budgeted machine-hours included 18,500. Actual factory overhead was $287,920, and 19,050 actual machine-hours. How much manufacturing overhead should the manager allocate to the job?

Answer 1

allocate overhead for the job: 274,320‬

Step-by-step explanation:

`(Cost\: Of \:Manufacturing \:Overhead)/(Cost \:Driver)= Overhead \:Rate`

we calculate the predeterminated rate based on the division between the expected overhead and the expected cost driver:

expected overhead cost: 266,400

expected machine hours: 18,500

rate: 266,400 / 18,500 = 14.4

applied overhead:

machine hours for the job x rate

19,050 x 14.4 = 274,320‬