A company has determined that its estimated 500,000 machine hours is the optimal driver for its...
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A company has determined that its estimated 500,000 machine hours is the optimal driver for its estimated R1,000,000 machine overhead cost pool. The R750, 000 in the material overhead cost pool should be allocated using the estimated 15,000 material requisition requests. The predetermined overhead rate is R2 per machine hour (R1,000,000/500,000 machine hours) and R50 per material requisition (R750, 000/15,000 requisitions). The actual and applied overhead can then be calculated to determine whether it is over- or under applied: 4.1 How much is over- or under applied if there were actually 490,000 machine hours and 15,500 material requisitions that resulted in R950, 000 in the machine overhead cost pool, and R780,000 in the material cost pool? (10) 4.2 What does this difference indicate? (3) A company has determined that its estimated 500,000 machine hours is the optimal driver for its estimated R1,000,000 machine overhead cost pool. The R750, 000 in the material overhead cost pool should be allocated using the estimated 15,000 material requisition requests. The predetermined overhead rate is R2 per machine hour (R1,000,000/500,000 machine hours) and R50 per material requisition (R750, 000/15,000 requisitions). The actual and applied overhead can then be calculated to determine whether it is over- or under applied: 4.1 How much is over- or under applied if there were actually 490,000 machine hours and 15,500 material requisitions that resulted in R950, 000 in the machine overhead cost pool, and R780,000 in the material cost pool? (10) 4.2 What does this difference indicate? (3)
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41 Actual overhead for machine hours 490000 x R2 R980000 Applied overhead for machine ... View the full answer
Related Book For
Management Accounting
ISBN: 9781760421144
7th Edition
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton
Posted Date:
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