Asked by Samira Saghafi on May 05, 2024
Verified
Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows:
Actual manufacturing overhead $80000
Estimated manufacturing overhead $75000
Direct labor hours incurred 4800
Direct labor hours estimated 5000
Instructions
Compute (a) the predetermined overhead rate and (b) the amount of applied manufacturing overhead.
Predetermined Overhead Rate
A calculated rate used to allocate manufacturing overhead costs to individual units of production, based on estimated or actual data.
Applied Manufacturing Overhead
The allocation of manufacturing overhead costs to individual units of production based on a formula or rate.
- Determine and utilize overhead charges through the use of predetermined overhead rates.
Verified Answer
DR
dinesh reddyMay 10, 2024
Final Answer :
(a) Predetermined overhead rate: $75000 5000 = $15 per direct labor hour
(b) Applied manufacturing overhead: 4800 × $15 = $72000
(b) Applied manufacturing overhead: 4800 × $15 = $72000
Learning Objectives
- Determine and utilize overhead charges through the use of predetermined overhead rates.
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