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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Question 3: Erickson Company applies unit-related manufacturing overhead on the basis of machine hours. The following unit-related overhead data were accumulated by the accounting department: Estimated Actual Machine Hours 450,000 600,000 Overhead costs $720,000 $950,000 What is the amount of over- or under applied overhead? Predetermined Overhead Rate = $720,000 ÷ 450,000 ˜ $1.79 Actual Overhead Costs = $950,000 (given) Estimated Overhead Costs = $1.79 * 600,000 = $1,074,000 Difference = $1,074,000 - $950,000 = $124,000 Underapplied
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