The following budget data are available for Sharp Company: If factory overhead is applied based on direct labor hours, the amount of overhead to be applied is

Question

The following budget data are available for Sharp Company:  If factory overhead is applied based on direct labor hours, the amount of overhead to be applied is

Quizplus · Accepted Answer

To calculate the amount of factory overhead to be applied based on direct labor hours, we need to multiply the direct labor hours (33,000) by the predetermined overhead rate ($5.00 per direct labor hour) as follows: 
33,000 x $5.00 = $165,000

Therefore, the amount of overhead to be applied is $172,500 (not including the underapplied/overapplied overhead balance). This is calculated by adding the actual overhead ($172,500) to the underapplied overhead balance ($-7,500) as follows:
$172,500 + (-$7,500) = $165,000

Therefore, the best choice is C.

The Following Budget Data Are Available for Sharp Company