The predetermined manufacturing overhead rate for the year was $14.00 per direct labor hour; employees were paid $17.50 per hour. If the estimated direct labor cost was $315,000, what was the estimated manufacturing overhead?
A) $22,500.
B) $90,000.
C) $252,000.
D) $393,750.

Question

Quizplus · Accepted Answer

The estimated direct labor cost is $315,000, and employees are paid $17.50 per hour. Therefore, the estimated direct labor hours are $315,000 / $17.50 = 18,000 hours. The predetermined overhead rate is $14.00 per direct labor hour, so the estimated manufacturing overhead is 18,000 hours * $14.00 = $252,000.

The Predetermined Manufacturing Overhead Rate for the Year Was $14