Garret Corporation uses a predetermined overhead rate of $62.75 per direct labor
ID: 2392506 • Letter: G
Question
Garret Corporation uses a predetermined overhead rate of $62.75 per direct labor-hour. This plantwide predetermined rate was based on a cost formula that estimated $9,412,500 of total manufacturing overhead for an estimated activity level of 150,000 direct labor-hours.
The company incurred actual total manufacturing overhead costs of $9,476,275 and 155,000 total direct labor-hours during the period.
Required:
Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.
Explanation / Answer
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Predetermined overhead rate $ 62.75 Actual Direct Labour Hours 155,000 Manufacturing overhead Applied(62.75*155000) $ 9,726,250
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