Question

Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows:
Actual manufacturing overhead $80,000
Estimated manufacturing overhead $75,000
Direct labor hours incurred 4,800
Direct labor hours estimated 5,000

a. Compute the predetermined overhead rate.
b. Calculate the amount of applied manufacturing overhead.

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Estimated manufacturing overhead $75,000

Direct labor hours incurred 4,800

Direct labor hours estimated 5,000

A) Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 75,000/5,000= $15 per direct labor hour

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

Allocated MOH= 15*4,800= $72,000