Sawyer Company had the following information for the year: Direct materials used$197,700 Direct labor incurred (7,600 hours) $248,100 Actual manufacturing overhead incurred$273,300 Sawyer Company used a predetermined overhead rate using estimated overhead of $382,500 and 8,500 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods balance of $9,400. How much overhead was applied during the year

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Business

Gabriela Bell

27 October, 15:20

Sawyer Company had the following information for the year: Direct materials used$197,700 Direct labor incurred (7,600 hours) $248,100 Actual manufacturing overhead incurred$273,300 Sawyer Company used a predetermined overhead rate using estimated overhead of $382,500 and 8,500 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods balance of $9,400. How much overhead was applied during the year

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Destiny Wright · Answer 1

Allocated MOH = $342,000

Explanation:

Giving the following information:

Sawyer Company used a predetermined overhead rate using estimated overhead of $382,500 and 8,500 estimated direct labor hours.

Actual direct labor hours = 7,600

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

Estimated manufacturing overhead rate = 382,500/8,500 = $45 per direct labor hour

Now, we can allocate overhead:

Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

Allocated MOH = 45*7,600 = $342,000