Essentials of Business Analytics (MindTap Course List)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN: 9781305627734
Author: Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher: Cengage Learning
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Predetermined OH Rates; Capacity Measures

Alberton Electronics makes inexpensive GPS navigation devices and uses a normal cost system that applies overhead based on machine hours. The following current year budgeted data are available:

Variable factory overhead at 100,000 machine hours $1,250,000
Variable factory overhead at 150,000 machine hours 1,875,000
Fixed factory overhead at all levels between 10,000 and 180,000 machine hours 1,440,000

Practical capacity is 180,000 machine hours; expected capacity is two-thirds of practical.

a. What is Alberton Electronics' predetermined VOH rate?
Predetermined VOH rate $
per MH
b. What is the predetermined FOH rate using practical capacity?
Predetermined FOH rate
per MH
c. What is the predetermined FOH rate using expected capacity?
Predetermined FOH rate $
per MH
d. During the year, the firm records 110,000 machine hours and $2,710,000 of overhead costs.
(1) How much variable overhead is applied?
Applied VOH $
(2) How much fixed overhead is applied using the rate found in (b)?
Applied FOH $
(3) Calculate the total under- or overapplied overhead for the year using the rate found in (b).
Note: Do not use a negative sign with your answer.
$
(4) How much fixed overhead is applied using the rate found in (c)?
Applied FOH $
(5) Calculate the total under- or overapplied overhead for the year using the rate found in (c).
Note: Do not use a negative sign with your answer.
A
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Transcribed Image Text:a. What is Alberton Electronics' predetermined VOH rate? Predetermined VOH rate $ per MH b. What is the predetermined FOH rate using practical capacity? Predetermined FOH rate per MH c. What is the predetermined FOH rate using expected capacity? Predetermined FOH rate $ per MH d. During the year, the firm records 110,000 machine hours and $2,710,000 of overhead costs. (1) How much variable overhead is applied? Applied VOH $ (2) How much fixed overhead is applied using the rate found in (b)? Applied FOH $ (3) Calculate the total under- or overapplied overhead for the year using the rate found in (b). Note: Do not use a negative sign with your answer. $ (4) How much fixed overhead is applied using the rate found in (c)? Applied FOH $ (5) Calculate the total under- or overapplied overhead for the year using the rate found in (c). Note: Do not use a negative sign with your answer. A
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Essentials of Business Analytics (MindTap Course ...
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ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning