Question

Leelanau applies overhead using a predetermined rate. What amount of overhead was applied to work in process last year

Answer 1

$138,500

Step-by-step explanation:

The computation of the overhead applied is shown below:

As we know that

Cost of goods manufactured = Beginning WIP + Total manufacturing costs - Ending WIP

$323,000 = $10,500 + Total manufacturing costs - $19,000

So,

Total manufacturing costs is

= ($323,000 + $19,000 - $10,500)

= $331,500

Now

Total manufacturing costs is

= Direct materials + Direct labor + Overheads

So,

Overheads is

= ($331,500 - $115,000 - $78,000)

= $138,500