2 Luthan Company uses a plantwide predetermined overhead rate of $23.40 per dire

Question

2 Luthan Company uses a plantwide predetermined overhead rate of $23.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $280,800 of total manufacturing overhead cost for an estimated activity level of 12,000 direct labor- hours The company incurred actual total manufacturing overhead cost of $268,000 and 12,400 total direct labor-hours during the period. SkppedRequired: Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the perioc

Explanation / Answer

Manufacturing overhead applied:

= Actual hours×Predetermined overhead per hour

= 12,400×$23.40

= $290,160

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