Question

Before the year began, Murphy manufacturing estimated that manufacturing overhead for the year would be $175,000 and 13,000 direct labor hours would be worked. Actual results for the year included the following:Actual MOH cost $184,000Actual DL hours 14,500the amount of manufacturing overhead allocated for the year based on direct labor hours would have been:(a) $184,000(b) $195,750(c) $175,500(d) $179,750

Answer 1

The correct answer is B: $195,750

Step-by-step explanation:

Giving the following information:

Manufacturing overhead for the year would be $175,000 and 13,000 direct labor hours would be worked.

Actual results for the year included the following:

Actual MOH cost $184,000

Actual DL hours 14,500

First, we need to calculate the manufacturing overhead rate:

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

manufacturing overhead rate= 175000/13000= 13.5

Now, we can calculate the amount of manufactured overhead allocated:

Manufactured overhead allocated= overhead rate* actual direct labor hours

Manufactured overhead allocated= 13.5*14500= $195,750