Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, actual labor hours were 21,000. The amount of manufacturing overhead applied to production would be:

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Quizplus · Accepted Answer

The predetermined overhead rate is calculated as estimated overhead ($400,000) divided by estimated labor hours (20,000), which equals $20 per labor hour. The applied overhead is then calculated by multiplying the predetermined rate ($20) by the actual labor hours (21,000), resulting in $420,000.

Manufacturing Overhead Was Estimated to Be $400,000 for the Year