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# Ch2_apply+overhead - completed and sold Step 2 Calculate...

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APPLYING OVERHEAD Information given: Estimated overhead \$ 1,000,000 Estimated machine hours 500,000 Actual overhead 980,000 Actual machine hours 495,000 Step 1: Calculate the predetermined overhead rate: Estimated overhead costs = POHR Estimated allocation base activity level \$ 1,000,000 = \$2 / MH 500,000 MH Actual overhead costs are not used to calculate POHR, because they may not be known until after the job is
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Unformatted text preview: completed and sold. Step 2: Calculate the overhead applied 495,000 MH × \$2/MH = \$990,000 Step 3: Determine the under-or-overapplied overhead Manufacturing Overhead (Actual) 980,000 990,000 (Applied) 10,000 (Overapplied: Applied > Actual) Manufacturing overhead 10,000 Cost of goods sold 10,000 OR Manufacturing overhead 10,000 WIP 3,333 FG 3,333 COGS 3,333...
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