Aurora, Inc. estimates manufacturing overhead costs for the 2019 accounting period as follows:…
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Aurora, Inc. estimates manufacturing overhead costs for the 2019 accounting period as follows:
Equipment depreciation…………………………………….. $344,000
Supplies…………………………………………………………42,000
Materials handling……………………………………………. 68,000
Property taxes………………………………………………… 30,000
Production setup……………………………………………… 42,000
Rent……………………………………………………………. 70,000
Maintenance………………………………………………….. 60,000
Supervisory salaries…………………………………………. 244,000
The company uses a predetermined overhead rate based on machine hours. Estimated hours for labor in 2019 were 200,000 and for machines were 125,000.
Required
a. Calculate the predetermined overhead rate.
b. Determine the amount of manufacturing overhead applied to Work in Process Inventory during the 2019 period if actual machine hours were 140,000.
Aurora Inc estimates manufacturing overhead costs for the 2019 accounting
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