Peoria charges manufacturing overhead to products by using a

Peoria charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of machine hours. The following pertain to the current year

Budgeted manufacturing overhead: $1,560,000

Actual manufacturing overhead: $1,460,000

Budgeted maching hours: 120,000

Actual machine hours: 122,000

Over-or-under-applied overhead totaled:

Solution

predetermined overhead rate = estimated MOH/estimated MH\'s 1,560,000/120,000 13 per machine hour Applied overhead = overhead rate* Actual machine hours 13*122,000 1586000 over or under applied overhead Applied overhead 1,586,000 Actual overhead 1,460,000 overhead over applied 126,000 answer