Question

Here are selected data for Wilson​ Company: Estimated manufacturing overhead $ 247 comma 760$247,760 Factory utilities ​ $30,200 Estimated labor hours ​ 35,000 Indirect labor ​ $22,400 Actual direct labor hours ​ 36,000 Sales commissions ​ $53,700 Estimated direct labor cost $ 326 comma 000$326,000 Factory rent ​ $47,700 Actual direct labor cost $ 320 comma 400$320,400 Factory property taxes ​ $28,100 Factory depreciation ​ $65,400 Indirect materials ​ $33,000 If the company allocates manufacturing overhead based on direct labor​ cost, what are the allocated manufacturing overhead​ costs

Answer 1

Allocated overhead= $254,880

Step-by-step explanation:

Giving the following information:

Estimated manufacturing overhead $247,760

Factory utilities ​ $30,200

Estimated labor hours ​ 35,000

Indirect labor ​ $22,400

Actual direct labor hours ​ 36,000

Sales commissions ​ $53,700

Estimated direct labor cost $326,000

Factory rent ​ $47,700

Actual direct labor cost $ 320400

Factory property taxes ​ $28,100

Factory depreciation ​ $65,400

Indirect materials ​ $33,000

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= 247760/35000= $7.08 per direct labor hour

Now, we can determine the allocated overhead

Allocated overhead= manufacturing overhead rate* actual hours= 7.08*36000= $254,880