Question

Albany Enterprises’ budget included the following estimated costs for the 2015 accounting period.
Depreciation on manufacturing equipment ...... $15,200
Cost of manufacturing supplies ........... 3,000
Direct labor cost ................. 86,400
Rent on manufacturing facility ............ 7,600
Direct materials cost ................ 74,000
Manufacturing utilities cost .............. 6,000
Maintenance cost for manufacturing facility ...... 4,200
Administrative salaries cost .............. 30,500
The company uses a predetermined overhead rate based on machine hours. It estimated machine hour usage for 2015 would be 30,000 hours.

Required
a. Identify the manufacturing overhead costs Albany would use to calculate the predetermined overhead rate.
b. Calculate the predetermined overhead rate.
c. Explain why the rate is called “predetermined.”
d. Assuming Albany actually used 31,000 machine hours during 2015 determine the amount of manufacturing overhead it would have applied to Work in Process Inventory during the period.



$1.99
Sales0
Views146
Comments0
  • CreatedFebruary 07, 2014
  • Files Included
Post your question
5000