The following information was gathered for the Wesley Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours. What amount of manufacturing overhead would be allocated for the year? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)

Question

The following information was gathered for the Wesley Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours.  What amount of manufacturing overhead would be allocated for the year? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)

Quizplus · Accepted Answer

To calculate manufacturing overhead, we need to multiply the direct labor hours by the predetermined overhead rate. 
Predetermined Overhead Rate = Estimated Total Manufacturing Overhead Cost / Estimated Total Direct Labor Hours
Predetermined Overhead Rate = ($2,840,000 + $420,000) / 160,000
Predetermined Overhead Rate = $3,260,000 / 160,000
Predetermined Overhead Rate = $20.375 per direct labor hour

Manufacturing Overhead Allocated = Actual Direct Labor Hours * Predetermined Overhead Rate
Manufacturing Overhead Allocated = 51,441 * $20.375
Manufacturing Overhead Allocated = $1,048,060.94

Therefore, the best choice is B, $1,048,061.

The Following Information Was Gathered for the Wesley Corporation for the Most