Question

The Osborne Company manufactures products in two​ departments:

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Estimated overhead costs for the year are $ 810,000​, and estimated direct labor hours are 360,000.

The company incurred 20,000 direct labor hours.

First, we need to calculate the estimated overhead rate:

To calculate the estimated manufacturing overhead rate we need to use the following formula:

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

Estimated manufacturing overhead rate= 810,000/360,000= $2.25 per direct labor hour

Now, we can allocate overhead based on actual direct labor hours:

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

Allocated MOH= 2.25*20,000= $45,000