Answer:
Allocated MOH= $29,520
Explanation:
Giving the following information:
Estimated manufacturing overhead cost= $416,000
Direct labor cost= $520,000.
The firm allocates manufacturing overhead based on direct labor cost. For August, direct labor cost was $36,900.
First, we need to calculate the estimated overhead rate:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 416,000/520,000= $0.8 per direct labor dollar.
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 0.8*36,900= $29,520
