Question

The following annual amounts pertain to ABC Company: Estimated Overhead Costs $ 101,988 Estimated Direct Labor hours 67,992 If actual direct labor worked in February was 6,000 hours, how much overhead cost would be applied to work-in-process for the month

Answer 1

Answer:

applied overhead for February 9,000

Explanation:

$\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate$

expected overhead 101,988

estimated cost dirve 67,992

overheead rate:

$\frac{101,988}{67,992}= Overhead \:Rate$

Overhead rate = 1.5

Now, applied overhead:

driver usage x rate

6,000 labor hours x 1.5 per hour = $9,000