Answer:
Allocated Overhead= $76,000
Explanation:
Giving the following information:
Estimated overhead for the period= $80,000
Estimated direct labor hours= 4,000 for the same period
Actual direct labor hours for the period are 3,800.
<u>First, we need to calculate the estimated overhead rate. Then, we can determine the amount of overhead allocated to work in process for the period.</u>
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= 80,000/4,000= $20 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 20*3,800= $76,000
