Daguio Corporation uses direct labor-hours in its predetermined overhead rate.At the beginning of the year,the total estimated manufacturing overhead was $224,580.At the end of the year,actual direct labor-hours for the year were 18,200 hours,manufacturing overhead for the year was underapplied by $12,100,and the actual manufacturing overhead was $219,580.The predetermined overhead rate for the year must have been closest to:
A)$11.40 per machine-hour
B)$12.34 per machine-hour
C)$12.06 per machine-hour
D)$10.53 per machine-hour

Question

Quizplus · Accepted Answer

Manufacturing overhead applied = Actual overhead - Underapplied overhead
= $219,580 - $12,100
= $207,480
Predetermined overhead rate = Estimated total manufacturing overhead F1F1F1S1F1F1F10 Estimated total amount of the allocation base = $207,480 F1F1F1S1F1F1F10 18,200 direct labor-hours = $11.40 per direct labor-hour

Daguio Corporation Uses Direct Labor-Hours in Its Predetermined Overhead Rate