Barr Mfg.provided the following information from its accounting records for 2013: $$\begin{array} { l r }
\text { Expected production } & 30,000 \text { labor hours } \
\text { Actual production } & 28,000 \text { labor hours } \
\text { Budgeted overhead } & \$ 900,000 \
\text { Actual overhead } & \$ 870,000
\end{array}$$ How much is the overhead application rate if Barr bases the rate on direct labor hours?
A) $32.14 per hour
B) $30.00 per hour
C) $29.00 per hour
D) $31.07 per hour

Question

Barr Mfg.provided the following information from its accounting records for 2013: $$\begin{array} { l r } 
\text { Expected production } & 30,000 \text { labor hours } \
\text { Actual production } & 28,000 \text { labor hours } \
\text { Budgeted overhead } & \$ 900,000 \
\text { Actual overhead } & \$ 870,000
\end{array}$$ How much is the overhead application rate if Barr bases the rate on direct labor hours?
A)  $32.14 per hour
B)  $30.00 per hour
C)  $29.00 per hour
D) $31.07 per hour

Quizplus · Accepted Answer

The overhead application rate is calculated by dividing the budgeted overhead by the expected production in labor hours: $900,000 / 30,000 hours = $30.00 per hour.

Barr MfgProvided the Following Information from Its Accounting Records for 2013