The following information was gathered for Spartans Company: $\begin{array}{ll}
\text { Budgeted direct-labor hours } & 34,000 \
\text { Actual direct- lab or hours } & 32,400 \
\text { Budgeted factory overhead } & \$ 144,500 \
\text { Actual factory overhead } & \$ 149,980
\end{array}$ Assume the cost driver is direct- labor hours. The amount of factory overhead applied is:

Question

Quizplus · Accepted Answer

The overhead rate is calculated as Budgeted Overhead / Budgeted Direct-Labor Hours = $144,500 / 34,000 = $4.25 per hour. Applied overhead = Actual Direct-Labor Hours x Overhead Rate = 32,400 x $4.25 = $137,700.

The Following Information Was Gathered for Spartans Company Assume the Cost Driver Is Direct- Labor Hours