At the beginning of the year, managers at King Industries estimated $400,000 in manufacturing overhead, 20,000 direct labor hours and 50,000 machine hours.Actual manufacturing costs at the end of the year were $425,000 in manufacturing overhead.During the year 22,000 direct labor hours and 47,000 machine hours were incurred.If overhead is applied based on direct labor hours, how much overhead was applied during the year?

Question

Quizplus · Accepted Answer

The overhead rate based on direct labor hours is calculated as estimated manufacturing overhead divided by estimated direct labor hours, which is $400,000 / 20,000 = $20 per direct labor hour. The overhead applied during the year is then this rate multiplied by the actual direct labor hours incurred, which is $20 * 22,000 = $440,000.

At the Beginning of the Year, Managers at King Industries