Question

Carter Corp. applies Manufacturing OH on the basis of Machine Hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $135,850. Actual manufacturing overhead for the year amounted to $145,000 and actual machine hours were 5,660. The company's predetermined overhead rate for the tear was $24.70 per machine hour. The applied manufacturing overhead for the year was closest to:

1) $135,850
2) $149,218
3) $143,869
4) $139,802

Answer 1

The applied manufacturing overhead for the year was $139,822, which is closest to option 4) $139,802.

Step-by-step explanation:

To determine the applied manufacturing overhead, we need to multiply the actual machine hours by the predetermined overhead rate. In this case, the actual machine hours were 5,660 and the predetermined overhead rate was $24.70 per machine hour. So, applied manufacturing overhead = actual machine hours * predetermined overhead rate = 5,660 * $24.70 = $139,822. The applied manufacturing overhead for the year was closest to option 4) $139,802.