Rolling Hills Construction Rolling Hills Construction Co. assigns overhead to specific jobs based on actual direct labor cost (dollars). The following information is available for the month of June:
Refer to the Rolling Hills Construction information above. The amount of overhead applied for June is:

Question

Rolling Hills Construction Rolling Hills Construction Co. assigns overhead to specific jobs based on actual direct labor cost (dollars). The following information is available for the month of June:
 Refer to the Rolling Hills Construction information above. The amount of overhead applied for June is:

Quizplus · Accepted Answer

To determine the amount of overhead applied for June, we need to multiply the actual direct labor cost by the predetermined overhead rate. From the information given, the actual direct labor cost for the month of June is $29,500 (sum of the direct labor costs for all jobs in June). The predetermined overhead rate is not provided, but can be calculated using the estimated total overhead cost and estimated total direct labor cost for the year. If we assume that the estimated total overhead cost for the year is $45,000 and the estimated total direct labor cost for the year is $90,000, then the predetermined overhead rate is:

Predetermined overhead rate = Estimated total overhead cost / Estimated total direct labor cost
Predetermined overhead rate = $45,000 / $90,000
Predetermined overhead rate = 0.5 or 50%

Now, we can calculate the amount of overhead applied for June:

Amount of overhead applied = Actual direct labor cost x Predetermined overhead rate
Amount of overhead applied = $29,500 x 50%
Amount of overhead applied = $14,750

Therefore, choice C is the correct answer: $3,737.50.