Question

Bentley estimates manufacturing overhead of $1,949,400 for 2019 and will apply overhead to units produced based on 722,000 machine hours. During 2019, Bentley used $1,470,000 of raw materials, paid $2,573,300 of direct labor, generated 717,000 machine hours, and produced 2,020,000 units. Required: Calculate Bentley’s predetermined overhead rate and cost per unit of production for 2019. (Round your answers to 2 decimal places.)

Answer 1

Instructions are listed below.

Step-by-step explanation:

Giving the following information:

Bentley estimates manufacturing overhead of $1,949,400 for 2019 and will apply overhead to units produced based on 722,000 machine hours.

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

Estimated manufacturing overhead rate= 1,949,400/722,000= $2.7 per machine hour.

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

Allocated MOH= 2.7*717,000= $1,935,900

Production cost= direct material + direct labor + allocated moh

Production cost= 1,470,000 + 2,573,300 + 1,935,900= 5,979,200

Unitary cost=5,979,200/2,020,000= $2.96