Question

The following information is provided for the year: Actual direct labor hours worked 36,000 Budgeted overhead $300,000 Budgeted direct labor hours 30,000 Actual overhead costs incurred $360,000 If normal costing is used, the amount of overhead applied for the year is:

Group of answer choices

a. $299,880
b. $300,000
c. $380,000
d. $360,000

Answer 1

Option (D) is correct.

Step-by-step explanation:

Overhead rate = Budgeted overhead ÷ budgeted direct labor hour

= $300,000 ÷ 30,000

Overhead rate = $10 per labor hour

Overhead applied:

= Overhead rate × Actual direct labor hours worked

= $10 per labor hour × 36,000

= $360,000

Therefore, the amount of overhead applied for the year is $360,000.