Question

Last year, the Corporation worked 19,400 actual direct labor-hours and incurred $156,400 of actual manufacturing overhead cost. They had estimated at the beginning of the year that 17,200 direct labor-hours would be worked and $154,800 of manufacturing overhead costs incurred. The Corporation had calculated a predetermined overhead rate of $9 per direct labor-hour. The Corporation's manufacturing overhead for the year was:

Answer 1

Results are below.

Step-by-step explanation:

Giving the following information:

Last year, the Corporation worked 19,400 actual direct labor-hours.

The Corporation had calculated a predetermined overhead rate of $9 per direct labor-hour.

To allocate overhead, we need to use the following formula:

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

Allocated MOH= 9*19,400

Allocated MOH= $174,600

Now, we can determine the over/under allocation:

Under/over applied overhead= real overhead - allocated overhead

Under/over applied overhead= 156,400 - 174,600

Under/over applied overhead= $18,200 overallocated