Brace Corporation uses direct labor-hours in its predetermined overhead rate.At the beginning of the year,the estimated direct labor-hours were 21,600 hours.At the end of the year,actual direct labor-hours for the year were 20,400 hours,the actual manufacturing overhead for the year was $506,920,and manufacturing overhead for the year was underapplied by $23,440.The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:
A)$501,920
B)$531,445
C)$483,480
D)$511,920

Question

Quizplus · Accepted Answer

Underapplied overhead = Actual overhead - Manufacturing overhead applied
Manufacturing overhead applied = Actual overhead - Underapplied overhead
= $506,920 - $23,440
= $483,480
Predetermined overhead rate = Estimated total manufacturing overhead F1F1F1S1F1F1F10 Estimated total amount of the allocation base = $483,480 F1F1F1S1F1F1F10 20,400 direct labor-hours
= $23.70 per direct labor-hour
Predetermined overhead rate = Estimated total manufacturing overhead F1F1F1S1F1F1F10 Estimated total amount of the allocation base
Estimated total manufacturing overhead = Predetermined overhead rate F1F1F1S1F1F1F10 Estimated total amount of the allocation base
= $23.70 per direct labor-hour F1F1F1S1F1F1F10 21,600 direct labor-hours
= $511,920

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