Actual fixed overhead is $33,300 (12,000 machine hours)and fixed overhead was estimated at $34,000 when the predetermined rate of $3.00 per machine hour was set.If 11,500 standard hours were allowed for actual production,applied fixed overhead is
A)$33,300.
B)$34,000.
C)$34,500.
D)not determinable without knowing the actual number of units produceD.

Question

Quizplus · Accepted Answer

The predetermined rate of $3.00 per machine hour was set based on the estimated fixed overhead of $34,000 and the estimated machine hours of 12,000. Thus, the predetermined rate can be calculated as:
$3.00 = $34,000 / 12,000 machine hours

To find the applied fixed overhead, we need to multiply the actual number of hours worked (11,500) by the predetermined rate:

Applied fixed overhead = Predetermined rate x Actual hours worked
Applied fixed overhead = $3.00 x 11,500
Applied fixed overhead = $34,500

Therefore, the applied fixed overhead is $34,500, which is the closest option to the estimated overhead of $34,000. Option C is the correct answer.

Actual Fixed Overhead Is $33,300 (12,000 Machine Hours)and Fixed Overhead