Answer:
Overhead of $279,216 is applied to production
Explanation:
Over head applied to the production is based on the predetermined overhead rate. The formula for predetermined overhead rate formula is
Predetermined overhead rate = Budgeted overhead / Budgeted activity
Predetermined overhead rate = Budgeted overhead / Machine Hours
Predetermined overhead rate = $271296 / 18,840
Predetermined overhead rate = $14.4 per machine hour
Actual machine hours = 19,390 machine hours
Overhear applied to the production = Predetermined overhead rate x Actual Machine hours
Overhear applied to the production = $14.4 x 19,390= $279,216
Answer:
$279216
Explanation:
Budgeted rate = [tex]\frac{Budgeted factory overhead}{Budgeted Machine Hours}[/tex] = [tex]\frac{271296}{18840}[/tex] = 14.4
Budgeted factory overhead = $271296
Budgeted Machine hours = 18840
Actual overhead cost = $289620
Allocated overhead cost = actual hours * budgeted rate
= 19390 * 14.4 = $279216
from the calculations it is noted that the allocated overhead cost is lower than the actual overhead cost incurred by the corporation hence the overhead cost was underapplied
actual overhead cost - allocated overhead cost
