At the beginning of the year, Ilberg Company estimated the following costs: Ilbe
ID: 2426069 • Letter: A
Question
At the beginning of the year, Ilberg Company estimated the following costs:
Ilberg uses normal costing and applies overhead on the basis of direct labor cost. (Direct labor cost is equal to total direct labor hours worked multiplied by the wage rate.) For the month of December, direct labor cost was $43,700.
Calculate the predetermined overhead rate for the year. Enter the percentage as a whole number.______%of direct labor cost
Calculate the overhead applied to production in December.
Overhead $416,000 Direct labor cost 520,000Explanation / Answer
Over head rate = 416000 / 520000 x 100
= 80% of direct labour cost
Overhead applied for december = $43700 x 80%
= 34960
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