Baken Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $172,140 and 3,800 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $171,000 and actual direct labor-hours were 3,880.
-The overhead for the year was:

Question

Quizplus · Accepted Answer

The predetermined overhead rate is calculated as $172,140 / 3,800 hours = $45.30 per hour. Applied overhead is $45.30 * 3,880 hours = $175,764. Since actual overhead is $171,000, the overhead is overapplied by $175,764 - $171,000 = $4,764.

Baken Corporation Applies Manufacturing Overhead on the Basis of Direct