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ABC Ltd uses a predetermined overhead rate to estimate the total manufacturing overhead for the quarter ending 30 September 2019. Based on this, the estimated total manufacturing overhead cost is $200,200 and the estimated level of activity is 11,000 machine hours.
By the end of 30 September 2019, ABC Ltd incurred actual total manufacturing overhead costs of $195 000 and 10 500 total machine hours.
Required:
Question (a) Calculate the predetermined overhead rate.
Question (b) Determine the amount of underapplied or overapplied manufacturing overhead for the quarter ending 30 September 2019.
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Discuss about Job Order Costing,JIT: Just-In-Time production systems,ABM: Activity-Based Management,TQM: Total Quality Management
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