(Answered) Problem - developing and using a predetermined overhead

Accounting

Problem - Developing and Using a Predetermined Overhead Rate

Assume that the following predictions were made for 2009 for one of the plants of Milliken & Company:

Total manufacturing overhead for the year - $44,000,000

Total machine hours for the year - 2,000,000

Actual results for February 2009 were as follows:

Manufacturing overhead - $5,480,000

Machine hours - 310,000

(a) Determine the 2009 predetermined overhead rate per machine hour.

(b) Using the predetermined overhead rate per machine hour, determine the manufacturing overhead applied to Work-in-Process during February.

(c) As of February 1, actual overhead was under-applied by $500,000. Determine the cumulative amount of any over-applied or under-applied overhead at the end of February.

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