Answered

IDNLearn.com provides a collaborative environment for finding and sharing knowledge. Ask your questions and receive accurate, in-depth answers from our knowledgeable community members.

Riverview Company's budget for the coming year includes $7,000,000 for manufacturing overhead, 40,000 hours of direct labor, and 200,000 hours of machine time. If Riverview applies overhead using a predetermined rate based on machine-hours, what amount of overhead will be assigned to a unit of output which requires 0.4 machine hours and 0.30 labor hours to complete

Sagot :

Ayokenny2001idn

Answer:

$70

Explanation:

With regards to the above, we need to compute first the overhead application rate.

Overhead application rate = Budgeted overhead / Budgeted activity/Budgeted machine hour

= $7,000,000 / 40,000 labor hours

= $175

Overhead application rate = $175 per direct labor hour

Assigned overhead = Overhead application rate × Number of machine hours consumed

= $175 × 0.4

= $70

Your participation means a lot to us. Keep sharing information and solutions. This community grows thanks to the amazing contributions from members like you. Thank you for choosing IDNLearn.com. We’re committed to providing accurate answers, so visit us again soon.