Question

Sawyer Company had the following information for the year: Direct materials used$197,700 Direct labor incurred (7,600 hours)$248,100 Actual manufacturing overhead incurred$273,300 Sawyer Company used a predetermined overhead rate using estimated overhead of $382,500 and 8,500 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods balance of $9,400. How much overhead was applied during the year

Answer 1

Allocated MOH= $342,000

Step-by-step explanation:

Giving the following information:

Sawyer Company used a predetermined overhead rate using estimated overhead of $382,500 and 8,500 estimated direct labor hours.

Actual direct labor hours= 7,600

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 382,500/8,500= $45 per direct labor hour

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 45*7,600= $342,000