A company uses job-order costing with manufacturing overhead (MOH) applied on the basis of machine hours (MHS). In the past, the company's pre- determined overhead rate (POHR) has fluctuated from period to period due primarily to differences in the expected usage of their machine. For this period, the machine has a capacity of 450 MHs, but based on anticipated production, only 375 MHs are expected to be required. The company's MOH is relatively fixed, estimated at $11,250 for both levels of MHs. At the end of the period, actual production used 386 MHs and total actual MOH amounted to $10,500. How much less MOH would be applied during the month using capacity MHs rather than the traditional method? Multiple Choice

A company uses job-order costing with manufacturing overhead (MOH) applied on the basis of machine hours (MHS). In the past, the company's pre- determined overhead rate (POHR) has fluctuated from period to period due primarily to differences in the expected usage of their machine. For this period, the machine has a capacity of 450 MHs, but based on anticipated production, only 375 MHs are expected to be required. The company's MOH is relatively fixed, estimated at $11,250 for both levels of MHs. At the end of the period, actual production used 386 MHs and total actual MOH amounted to $10,500. How much less MOH would be applied during the month using capacity MHs rather than the traditional method? Multiple Choice

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Description: A company uses job-order costing with manufacturing overhead (MOH) applied on the basis of machine hours (MHS). In the past, the company's pre-determined overhead rate (POHR) has fluctuated from period to period due primarily to differences in the e

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company uses job-order costing with manufacturing overhead (MOH) applied on the basis of machine hours (MHs). In the past, the company's pre-determined overhead rate (POHR) has fluctuated from period to period due primarily to differences in the expected usage of their machine. For this period, the machine has a capacity of 450 MHs, but based on anticipated production, only 375 MHs are expected to be required. The company's MOH is relatively fixed, estimated at $11,250 for both levels of MHs. At the end of the period, actual production used 413 MHs and total actual MOH amounted to $10.500. 1. How much less MOH would be applied during the month using capacity MHs rather than the traditional method?
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