Brace Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct

Question

ivann1987 [24]

3 years ago

11

Brace Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct

labor-hours were 21,600 hours. At the end of the year, actual direct labor-hours for the year were 20,400 hours, the actual manufacturing overhead for the year was $506,920, and manufacturing overhead for the year was underapplied by $23,440. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:_________
A. $501,920
B. $531,445
C. $483,480
D. $511,920

Business

1 answer:

Levart [38] · Answer 1 · 2021-12-08T19:03:51+03:00

Answer:

D. $511,920

Explanation:

For determining the estimated manufaturing overhead first determined the predetermined overhead which is shown below:

= (Actual manufacturing overhead - underapplied overhead) ÷ (actual direct labor hours)

= ($506,920 - $23,440) ÷ (20,400 hours)

= $23.7

Now the estimated manufacturing overhead is

= $23.7 × 21,600 hours

= $511,920