Exercise 4-2 Apply Overhead [LO4-2] Westan Corporation uses a predetermined over

Question

Exercise 4-2 Apply Overhead [LO4-2] Westan Corporation uses a predetermined overhead rate of $23.80 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $285,600 of total manufacturing overhead for an estimated activity level of 12,000 direct labor-hours. The company incurred actual total manufacturing overhead costs of $268,000 and 10,400 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

Manufacturing overhead applied=Predetermined overhead rate*Actual direct labor-hours

=($23.80*10400 hours)

=$247520.

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