<p>The following info was available for the Lincoln Company, a manufacturer of c

Question

<p>The following info was available for the Lincoln Company, a manufacturer of candy, for the year ended 12/31/07:<br />Item Amount<br />Budgeted Direct labor Hours 76,000<br />Actual Direct Labor Hours 78,500<br />Budgeted Factory Overhead 624,720<br />Actual Factory Overhead 638,000<br /><br />Certain ends of year balances are as follows:<br />Item Amount<br />Raw Material Inventory 150,000<br />Work in Process Inventory 150,000<br />Finished Goods Inventory 300,000<br />Cost of Goods Sold 200,000<br /><br />If the company uses <strong>direct labor hours</strong> to allocate overhead, compute the <strong>factory overhead applied</strong>.</p>

Explanation / Answer

Applied overhead per 1 labor hour = Budgeted factory overhead / Budgeted labor hours                                                       = 624,720 / 76,000 Applied overhead per 1 labor hour = $8.22 Actual direct labor hours worked     = 78,500 Applied factory overhead                = 78,500 x $8.22 So applied factory overhead            = $645,270

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.