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 $241,200 and 6,200 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $243,000 and actual direct labor-hours were 5,100. The applied manufacturing overhead for the year was closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

$198,390

Step-by-step explanation:

Calculation for the applied manufacturing overhead for the year

First step is to find the predetermined overhead rate using this formula

Let plug in the formula

Predetermined overhead rate=Estimated overhead/Estimated direct labor hours

Predetermined overhead rate=(241,200/6,200)

Predetermined overhead rate=$38.90 per direct labor hour

Second step is to calculate for the applied manufacturing overhead using this formula

Applied manufacturing overhead=Predetermined overhead rate×Actual direct labor-hours

Let plug in the formula

Applied manufacturing overhead=($38.90*5,100 hours)

Applied manufacturing overhead=$198,390

Therefore the applied manufacturing overhead for the year was closest to:$198,390