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 find out the amount of overhead to be applied based on direct labor hours, we need to first calculate the predetermined overhead rate.

Predetermined overhead rate = Estimated total overhead cost / Estimated total direct labor hours

= $690,000 / 4,500 hours

= $153.33 per direct labor hour

Now, we can calculate the amount of overhead to be applied by multiplying the predetermined overhead rate with the actual number of direct labor hours worked.

Amount of overhead to be applied = Actual direct labor hours worked x Predetermined overhead rate

= 1,125 hours x $153.33 per hour

= $172,496.25

Therefore, the best choice is C.

The Following Budget Data Are Available for Sharp Company: If