Question

Crinks Corporationu ses direct labor hours in its predetermined in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 14,400 hours and the total estimated manufacturing overhead was $355,680. At the end of the year, actual direct labor-hours for the year were 10,800 hours and the actual manufacturing overhead for the year was $254,840. Overhead at the end of the year was:_______

Answer 1

Answer: $11920 Overapplied

Explanation:

We have to calculate the Predetermined overhead rate which would be:

= Estimated total manufacturing overhead / Estimated amount of the allocation base

= $355,680 ÷ 14,400 direct labor-hours

= $24.70 per direct labor-hour

Since the actual hours is 10,800 hours, therefore, the applied overhead would be:

= 10,800 × 24.70

= $266,760

Since the actual overhead = $254,840, then the overapplied Overhead would be:

= $266,760 - $254,840

= $11920 Overapplied