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 $245,100 and 10,100 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $245,600 and actual direct labor-hours were 6,400.The applied manufacturing overhead for the year was closest to: (Round your intermediate calculations to 2 decimal places.)
A) $320,576
B) $155,328
C) $245,632
D) $155,648

Question

Quizplus · Accepted Answer

The applied manufacturing overhead is calculated using the predetermined overhead rate, which is based on the estimated overhead and estimated direct labor-hours at the beginning of the year. The predetermined overhead rate is $245,100 / 10,100 hours = $24.26 per direct labor-hour. The applied manufacturing overhead for the year is then this rate multiplied by the actual direct labor-hours: $24.26 * 6,400 hours = $155,328.

Baka Corporation Applies Manufacturing Overhead on the Basis of Direct