Question

Bakker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $97,500 and 3,000 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $99,400 and actual direct labor-hours were 2,850. The applied manufacturing overhead for the year was:________

Answer 1

Answer:

Allocated MOH= $92,625

Explanation:

First, we need to calculate the predetermined overhead rate:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 97,500 / 3,000

Predetermined manufacturing overhead rate= $32.5 per direct labor hour

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 32.5*2,850

Allocated MOH= $92,625