1. Forbes Company uses a predetermined overhead rate based on direct labor-hours
ID: 2504397 • Letter: 1
Question
1. Forbes Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the period, the company estimated manufacturing overhead would be $18,000 and direct labor-hours would be 15,000. The actual figures were $19,500 for manufacturing overhead and 16,000 direct labor-hours. The cost records for the period will show: (Points : 2)
overapplied overhead of $300
overapplied overhead of $1,500
underapplied overhead of $1,500
underapplied overhead of $300
I have tried to follow my textbook, but the answer I come up woth doesn't seem right, please help by showing me the process to find the predetermined overhead rate and then solve. Thanks!
1. Forbes Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the period, the company estimated manufacturing overhead would be $18,000 and direct labor-hours would be 15,000. The actual figures were $19,500 for manufacturing overhead and 16,000 direct labor-hours. The cost records for the period will show: (Points : 2)
Explanation / Answer
Predetermined overhead rate = $18,000
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