Ask Question
1 March, 10:31

Ruel 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 $77,250 and 2,500 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $79,000 and actual direct labor-hours were 2,400. The overhead for the year was:A. $3,090 overappliedB. $4,840 underappliedC. $4,840 overappliedD. $3,090 underapplied

+2
Answers (1)
  1. 1 March, 11:46
    0
    The answer is: B) $4,840 underapplied

    Explanation:

    First we calculate the estimated cost per direct labor hour:

    $77,250 / 2,500 = $30.90 per direct labor hour

    If only 2,400 direct labor hours were employed, then the estimated cost for total labor hours should have been $74,160 ( = $30.90 x 2,400), but instead the total cost was $79,000 which is $4,840 underapplied. The actual cost per direct labor hour is $32.92 ( = $79,000 / 2,400).
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Ruel Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers