Question

Luther company uses a predetermined over head rate of $23.40 per direct labor- hour. This predetermined rate was base on a cost formula that estimated $257,400 of total manufacturing overhead for an estimated activity level of 11,000 direct hours. The company incurred actual total manufacturing overhead cost of 249,000 and 10, 800 total direct labor hours during the period. Determine the amount of manufacturing overhead that would have been applied to all jobs during the period.

Answer 1

Answer:

Your answer is given below:

Explanation:

Overheads applied = 10800 x 23.40 = 252720

Actual overheads incurred = 249000

Overapplied overheads = 252720 - 249000

= 3720