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Manufacturing overhead is applied to the product based on machine hours used in each department under the rate of $20 per machine hour. The total machine hours are $60,000 of which $25,000 are related to the Mixing Department and the remaining are related to the Baking Department.

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Answer:

  • Total amount of manufacturing overhead applied to the baking department is $700,000
  • Total amount of manufacturing overhead applied to the mixing department is $500,000

Explanation:

manufacturing standard overhead rate $20 per machine hour (60,000 total machine hours)

  • mixing department = 25,000 machine hours x $20 = $500,000
  • baking department = 60,000 - 25,000 = 35,000 machine hours x $20 = $700,000
  • total overhead cost = $1,200,000 (equivalent to 60,000 machine hours)

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