Question

Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $242,400 and 7,400 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $243,800 and actual direct labor-hours were 5,500.The overhead for the year was_____________.

Answer 1

Under applied to the extent of $ 63,620

Step-by-step explanation:

We have to compute the predetermined overhead rate on direct labor hours.

Estimated overhead $ 242,400

Estimated direct labor hours 7400 hours

Predetermined overhead rate on direct labour hours $ 32.76 per hour

Applied overhead based on actual direct labor hours

5,500 labor hours * $ 32.76 per hour = $ 180,180

Actual manufacturing overhead $ 243,800

Underapplied overhead $ 63,620