Q. 17-21E-a - Horngren'S Financial And Managerial Accounting

Question

The manufacturing records for Sporty Kayaks at the end of the 2018 fiscal year show the following information about manufacturing overhead:

Overhead allocated to production	\(409,200
Actual manufacturing overhead cost	432,000
Predetermined overhead allocation rate	\)44 per machine hours

Requirements

1. How many machine hours did Sporty Kayaks use in 2018?

Step-by-Step Solution

Answer

The machine hours used by sporty kayaks in 2018 is 9,300 hours

Manufacturing overhead

The manufacturing overhead is defined as the aggregate of all the indirect cost incurred by the company on the production of the goods during the year.

The machine hours used by Sporty Kayaks in 2018

$$\begin{gathered} \mathbf{machine}\mathbf{ }\mathbf{hours}\mathbf{ }\mathbf{used}\mathbf{ }\mathbf{in}\mathbf{ }\mathbf{2018}\mathbf{=}\frac{\mathbf{overhead}\mathbf{ }\mathbf{allocated}\mathbf{ }\mathbf{to}\mathbf{ }\mathbf{production}}{\mathbf{predetermined}\mathbf{ }\mathbf{overhead}\mathbf{ }\mathbf{allocation}\mathbf{ }\mathbf{rate}\mathbf{ }} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\frac{\mathbf{\$}\mathbf{409}\mathbf{,}\mathbf{200}}{\mathbf{\$}\mathbf{44}} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{9}\mathbf{,}\mathbf{300}\mathbf{ }\mathbf{hours} \end{gathered}$$