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Carlson Company uses a predetermined rate to apply overhead. At the beginning of the year, Carlson estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000. Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000. If the predetermined overhead rate is based on machine hours, what is the total amount to the plantwide applied overhead for the year for Carlson?

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Answer:

Estimated manufacturing overhead rate= $24 per direct machine hour.

Explanation:

Giving the following information:

Carlson estimated its overhead costs at $240,000 and machine hours at 10,000. The predetermined overhead rate is based on machine hours.

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 240,000/10,000= $24 per direct machine hour.

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