Question

Winston Company estimates that the factory overhead for the following year will be $716,400. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 39,800 hours. The total machine hours for the year were 54,400 hours. The actual factory overhead for the year was $993,000 a. Determine the total factory overhead amount applied.

Answer 1

Answer:

$ 979,200

Explanation:

Data provided :

Estimated factory overhead for the year = $ 716,400

Estimated umber of machine hours = 39,800 hours

Total machine hour for the year = 54,400 hours

The actual factory overhead for the year = $ 993,000

Now,

the estimated overhead rate = Estimated factory overhead / Estimated umber of machine hours

or

overhead rate =  $ 716,400 / 39,800 hours = $ 18 / hr

therefore,

total factory overhead amount for the year = overhead rate × Actual machine hour for the year

or

total factory overhead amount for the year = $ 18 / hr × 54,400 hours

= $ 979,200