During the month of August, Ranson Productions applied overhead to jobs using an overhead rate of $0.60 per dollar of direct labor.Actual direct labor in August was 12,000 hours at $15.00 per hour, for a total of $180,000.Estimated overhead in August was $111,600.Actual overhead was composed of the following items: $$\begin{array} { l r }
\text { Indirect materials } & \$ 16,400 \
\text { Indirect labor } & 22,000 \
\text { Utilities } & 24,500 \
\text { Depreciation } & 38,700 \
\text { Repair expense } & 13,500 \
\text { Total } & \$ 115,100
\end{array}$$ How much overhead was applied during the year by Ranson Productions?

Question

During the month of August, Ranson Productions applied overhead to jobs using an overhead rate of $0.60 per dollar of direct labor.Actual direct labor in August was 12,000 hours at $15.00 per hour, for a total of $180,000.Estimated overhead in August was $111,600.Actual overhead was composed of the following items: $$\begin{array} { l r } 
\text { Indirect materials } & \$ 16,400 \
\text { Indirect labor } & 22,000 \
\text { Utilities } & 24,500 \
\text { Depreciation } & 38,700 \
\text { Repair expense } & 13,500 \
\text { Total } & \$ 115,100
\end{array}$$ How much overhead was applied during the year by Ranson Productions?

Quizplus · Accepted Answer

The overhead applied is calculated by multiplying the overhead rate by the actual direct labor cost. The overhead rate is $0.60 per dollar of direct labor, and the actual direct labor cost is $180,000. Therefore, the applied overhead is $0.60 * $180,000 = $108,000.

During the Month of August, Ranson Productions Applied Overhead to Jobs