APPLIED OVERHEAD IN A BANK
Estimated bank production capacity 800,000,000
Predetermined overhead rate (based on estimated production capacity) $0.01 per transaction
(one unit = one transaction)
Quarter Actual Units of Production
Compute the amount of total overhead applied under normal costing for each quarter.
What was the estimated overhead for the year for the predicted capacity of 800 million units?
In normal costing, the overhead is applied based on a predetermined rate. The predetermined rate is $0.01 per transaction.
We are given the transactions in each quarter
Quarter 1 - ...
The solution explains how to calculate the amount of applied and estimated overhead.