Hudson,Inc.has estimated total factory overhead costs of $400,000 and 20,000 direct labor hours for the current fiscal year.If direct labor hours for Job N41 total 1,500,calculate applied factory overhead applied to this job.

Question

Quizplus · Accepted Answer

To calculate the applied factory overhead, we need to use the predetermined overhead rate, which is calculated by dividing the estimated total factory overhead costs by the estimated total amount of direct labor hours.

Predetermined overhead rate = Estimated total factory overhead costs / Estimated total direct labor hours
Predetermined overhead rate = $400,000 / 20,000 = $20 per direct labor hour

Now, to find the applied factory overhead for Job N41, we can use the formula:

Applied factory overhead = Predetermined overhead rate x Actual direct labor hours 
Applied factory overhead = $20 x 1,500 = $30,000

Therefore, the correct answer is D) $30,000.