Before the year began, Johnson Manufacturing estimated that manufacturing overhead for the year would be $160,000 and that 12,000 direct labour hours would be worked. Actual results for the year included the following:
If the company allocates manufacturing overhead based on direct labour hours, the manufacturing overhead for the year would have been

Question

Before the year began, Johnson Manufacturing estimated that manufacturing overhead for the year would be $160,000 and that 12,000 direct labour hours would be worked. Actual results for the year included the following:  
If the company allocates manufacturing overhead based on direct labour hours, the manufacturing overhead for the year would have been

Quizplus · Accepted Answer

C) $160,000/12,000 = $13.33 × 15,000 = $200,000
$200,000 - 175,000 = 25,000 Overallocated

Before the Year Began, Johnson Manufacturing Estimated That Manufacturing Overhead