Question

Apple Tree Enterprises allocated overhead based on direct material cost and has a predetermined overhead rate of 160%. During the current period, direct labor cost is $67,000 and direct materials cost is $73,000. In the current period, determine the amount of overhead to be applied by Apple Tree Enterprises.

Answer 1

Allocated MOH= $116,800

Step-by-step explanation:

Giving the following information:

predetermined overhead rate= 160% of direct material

Direct materials= $73,000

To calculate the allocated overhead, we need to use the following formula:

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

Allocated MOH= 1.6*73,000

Allocated MOH= $116,800