Final answer:
The overhead applied during the year is calculated using the predetermined overhead rate, which is estimated manufacturing overhead divided by estimated direct labor hours. in this case, the applied overhead is $336,000, which is the product of the direct labor hours incurred (7,000 hours) and the predetermined overhead rate ($48 per hour).
Step-by-step explanation:
To calculate how much overhead was applied during the year, we need to determine the predetermined overhead rate, which is based on the estimated data. the predetermined overhead rate is calculated using the estimated total manufacturing overhead and the estimated total direct labor hours. in this scenario, the estimated manufacturing overhead is $388,800 and the estimated direct labor hours are 8,100 hours. the predetermined overhead rate per hour would be $388,800 divided by 8,100 hours, which is $48 per hour.
The company uses direct labor hours as the allocation base to apply overhead. to find out the applied overhead, we multiply the direct labor hours worked during the year by the predetermined overhead rate. The direct labor hours incurred are 7,000 hours. Therefore, the applied overhead is 7,000 hours times $48 per hour, which equals $336,000.