Answer:
The amount of applied overhead is $41,500
Explanation:
Given,
Beginning WIP -$ 23,000
Direct materials - $69,000
Ending WIP - $ 47,220
Beginning FG - $6,400
Ending FG - $169,280
By using the above information, it is easy to calculate the direct labor. Through which , the computation of applied overhead become easy.
The formula for computing direct labor is as follows:
1.50 × Direct labor + Beginning WIP + Direct materials = Ending WIP + Ending FG
1.50 × Direct labor + $ 23,000 +$69,000 = $ 47,220 + $169,280
1.50 × Direct labor + $ 92,000 = $ 216,500
1.50 × Direct labor = $ 216,500 - $ 92,000
1.50 × Direct labor = $124,500
Direct labor = $124,500 ÷ 1.50
Direct labor = $83,000
Thus, the direct labor is $83,000
The predetermined overhead rate of 50% of direct labor cost.
So,
Predetermined overhead rate = $83,000 × 50%
= $41,500
Thus, the amount of applied overhead is $41,500.
Note : Since ,the predetermined overhead rate of 50% of direct labor cost so we assume ( 1+0.50) 1.50 of direct labor because it is easy to calculate the predetermined overhead rate.
