Question

Showboat Corporation had actual manufacturing overhead costs for the most recent year of​ $29,500. Manufacturing overhead is allocated using a predetermined manufacturing overhead rate of​ $1.50 per direct labor hour. Direct labor cost is​ $19 per hour. At the end of the​ year, Cabaret Corporation found it had overallocated manufacturing overhead by​ $1,250. How much manufacturing overhead was allocated in total during the​ year?

Answer 1

The manufacturing overhead was allocated in total during the​ year is $20,500

Step-by-step explanation:

The computation of the allocated manufacturing overhead is shown below:

= (Actual manufacturing overhead costs + over allocated manufacturing overhead) ÷ (predetermined manufacturing overhead rate)

= ($29,500 + $1,250) ÷ ($1.50)

= $30,750 ÷ $1.50

= $20,500

The direct labor cost should not be considered in the computation part. Hence, ignored it