Manufacturing overhead and pre-determined overhead rate

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Reference no: EM13905132

Poole Company applies manufacturing overhead (MOH) using a pre-determined overhead rate (POHR) based on machine hours (MHs) with the following information for the period:

MHs estimated for the period 250,000

MHs actually incurred in the period 258,000

POHR for the period $ 5.50 per MH

Actual MOH for the period $ 1,410,000

The activity for the period was significantly less than Poole's capacity of 275,000 MHs, and so the CEO has asked about the impact of using a POHR based on capacity. If this is done, how much lower will the company's applied MOH be versus the traditional method?

A. $ 87,720

B. $ 129,000

C. $ 96,164

D. $ 85,000

E. None of the above

Reference no: EM13905132

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