question archive Happy Clicks Inc
Happy Clicks Inc
Subject:AccountingPrice:3.87 Bought7
Happy Clicks Inc. uses a predetermined overhead allocation rate of $4.75 per machine hour. Actual overhead costs incurred during the year are as follows:
Indirect materials $5,200
Indirect labor $3,750
Plant depreciation $4,800
Plant utilities and insurance $9,530
Other plant overhead costs $12,700
Total machine hours used during the year 7,520 hours
What is the amount of manufacturing overhead cost allocated to Work-in-Process Inventory during the year?
A) $35,720
B) $35,980
C) $27,030
D) $8,950
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Answer:
Manufacturing overhead cost allocated to Work-in-process Inventory
Manufacturing overhead cost allocated to Work-in-process Inventory is calculated by multiplying the predetermined overhead rate per hour with the total machine hours used during the year
Manufacturing overhead cost allocated to Work-in-process Inventory = Total machine hours used during the year x Predetermined overhead rate per machine hour
= 7,520 Machine Hours x $4.75 per hour
= $35,720
“Hence, the Manufacturing overhead cost allocated to Work-in-process Inventory will be (A). $35,720”
