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 the amount of overhead to be applied based on direct labor hours, we need to multiply the direct labor hours by the predetermined overhead rate. Predetermined overhead rate = Estimated total factory overhead / Estimated total direct labor hours = ($225,000 + $75,000) / 15,000 hours = $300,000 / 15,000 hours = $20 per direct labor hour. So, the amount of overhead to be applied = Actual direct labor hours x Predetermined overhead rate = 8,625 hours x $20 per hour = $172,500. Therefore, the best choice is C.

The Following Budget Data Are Available for Sharp Company: ​

The Following Budget Data Are Available for Sharp Company: