Question

Poland's Paints allocates overhead based on machine hours. Selected data for the most recent year follow. Estimated manufacturing overhead cost $238,900 Actual manufacturing overhead cost $244,100 Estimated machine hours 20,000 Actual machine hours 23,000 The estimates were made as of the beginning of the​ year, while the actual results were for the entire year. The amount of manufacturing overhead allocated for the year based on machine hours would have been​ _____ .​ (Round intermediary calculations to the nearest cent and final answer to the nearest​ dollar.) A. $274,850. B. $238,900. C. $244,100. D. $212,261.

Answer 1

Allocated MOH= $274,850

Step-by-step explanation:

Giving the following information:

Estimated manufacturing overhead cost $238,900

Estimated machine hours 20,000

Actual machine hours 23,000

First, we need to calculate the predetermined overhead rate:

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

Predetermined manufacturing overhead rate= 238,900/20,000

Predetermined manufacturing overhead rate= $11.945 per machine-hour

Now, we can allocate overhead:

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

Allocated MOH= 11.95*23,000

Allocated MOH= $274,850