Blueberry Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of machine hours. For the upcoming year, Blueberry Corp. estimated total manufacturing overhead cost at $225,000 and total machine hours of 45,000. During the year actual manufacturing overhead incurred was $258,750 and 47,600 machine hours were used. i. Calculate the predetermined overhead rate. ii. Calculate how much manufacturing overhead will be applied to production. iii. Is overhead over- or underapplied? By how much? iv. What account should be adjusted for over- or underapplied overhead? Should the balance be increased or decreased?

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Blueberry Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of machine
hours. For the upcoming year, Blueberry Corp. estimated total manufacturing overhead cost at $225,000 and total machine
hours of 45,000. During the year actual manufacturing overhead incurred was $258,750 and 47,600 machine hours were used.
i. Calculate the predetermined overhead rate.
ii. Calculate how much manufacturing overhead will be applied to production.
ii. Is overhead over- or underapplied? By how much?
iv. What account should be adjusted for over- or underapplied overhead? Should the balance be increased or decreased?
Edit Format Table
12pt v
Paragraph v BIUA ev T?v
1. $225,000/ 45000 = $5 Per Machine Hour
2.47600 x $5 = $238,000
I.
20 words
3.
4.
Transcribed Image Text:Blueberry Corp. uses a job order costing system with manufacturing overhead applied to products on the basis of machine hours. For the upcoming year, Blueberry Corp. estimated total manufacturing overhead cost at $225,000 and total machine hours of 45,000. During the year actual manufacturing overhead incurred was $258,750 and 47,600 machine hours were used. i. Calculate the predetermined overhead rate. ii. Calculate how much manufacturing overhead will be applied to production. ii. Is overhead over- or underapplied? By how much? iv. What account should be adjusted for over- or underapplied overhead? Should the balance be increased or decreased? Edit Format Table 12pt v Paragraph v BIUA ev T?v 1. $225,000/ 45000 = $5 Per Machine Hour 2.47600 x $5 = $238,000 I. 20 words 3. 4.
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Predetermined overhead rate is computed in order to determine the estimated overhead for a specific period even before it starts.

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