Question

Amy Corporation, which applies manufacturing overhead on the basis of direct labor hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $264,040 Estimated direct labor hours 2,300 Actual manufacturing overhead $258,000 Actual direct labor hours 2,260 The estimates of the manufacturing overhead and of direct labor hours were made at the beginning of the year. The applied manufacturing overhead for the year is closest to:

Answer 1

$259,448

Step-by-step explanation:

Estimated manufacturing overhead $264,040

Estimated direct labor hours 2,300

predetermined overhead rate = $114.80 per labor hour

Actual manufacturing overhead $258,000

Actual direct labor hours 2,260

actual overhead rate = $114.16

applied overhead for the year = actual direct labor hours x predetermined overhead rate = 2,260 hours x $114.80 = $259,448 overapplied ($259,448 ˃ $258,000)